What happens if you don’t pay a payday loan? There are several consequences I can think of and here is a list of what might happen and the explanations on the extent of their consequences in damaging your life.
Interest rates are accumulated to an amount worth four times or more from the actual amount you borrowed.
Lending companies charge an interest rate to the amount of cash advance you have acquired. This goes on until the payday company decides that you have reached the limit in earning your interest rates. You may have also issued a post-dated check to the lender, which can deposited on the payment date. If this check is deposited before the date stated on the check, then you also acquire a bouncing check fee. Another instance that usually happens is that when the time comes that the lender should deposit the check, it bounces back due to lack of funds which will also lead to increasing your debts. Lending companies may now take the next step to make you pay your debt.
Sending your profile information to a collections agency.
We have already heard stories of harassment from collection agencies and you don’t want it to happen to you. Of course, payday companies will exhaust all their efforts in trying to make you pay off what you owe. First of all, they will be calling you themselves. They will get in touch with you at least three times a day, whether you are at work, at home or somewhere else. Aside from making phone calls wherever you may be, they will also be sending you several notifications about your standing balance with their company. This collection tactic already made some borrowers unemployed. Because of annoying calls and mails, the borrower is already a cause for unhealthy working environment. If these steps still fail them to get their money back, the lender will then seek legal assistance.
Judicial actions that will really force you to pay.
Upon signing the term agreement of your loan, you have given the lending company the right to force you to repaying the debt. This includes legal actions against your person. What are the instances of you winning a judicial battle with the lender? Zero or none! A loan is still a debt and you have to pay it according to the document you have agreed upon. The court may be lenient and give suggestions on how you can repay the lending company. It may suggest that you and the lending company work on a payment scheme to give you ample time to search for enough money to pay off your debt. You may have signed up your real property to the lending company as collateral for your loan, then you can say goodbye to your hard earned property because it will be confiscated by the court as payment.
You may be sent in jail.
If all of the above steps fail to make you pay, the court will definitely rule against you and you may spend time in jail because of nonpayment of your payday loan.
Remember that payday loans are still debts and to fix your financial problems, you must face your debts. Accept responsibility for all your actions and decisions.