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Punishment for not Paying a Payday Loan




Pay day loans are categorized in the financial market as an unsecured loan. To check out the nature of unsecured loans, they demand higher interest rates. To justify the high rates, credit seekers are given the convenience of fast access to cash. Borrowers do not have to provide their credit file, and pay day loan companies shall not look into your credit history. Unlike personal loans offered by banking institutions, you do not have to pledge any property as collateral to get a payday loan.

Payday loans are not long-term fixes to your financial problem. In the event that you apply for a payday loan thinking that you can depend on it to resolve your long-term problem, you may be in deeper debts than before. Thus, it's important to pay off your pay day loan at the earliest opportunity, since there is no real way of escaping this type of loan. In the event that you fail to pay back your loan, you must prepare to face the consequences.

Here are some of the consequences for ignoring your pay day loan:

Overdraft Charges - Banks can levy high overdraft charges and penalties if your account has insufficient money which brought on your check to jump.

Penalty from Lender - The payday advance company can require you to pay penalties based on the stipulation of your arrangement.

Harassment and humiliation from Collection Agencies - In case your unpaid loan is referred to a collection firm, you might be subject to frequent humiliation and ignominy among your peers and the community. They have got the liberty of contacting you multiple times including getting in touch with your home, work place, or any other quantity.

Threat - Collection agencies also make use of emotional abuse with threatening calls.

Marred Credit Rating - Non-repayment of payday loans can be reported by the lender to the three credit reporting agencies in the US, causing severe damage to your credit score. In addition, by enough time you decide to pay back your lending options, lenders record the repayment to credit reporting agencies rarely. Should this happen, it will be hard so that you can qualify for other loans.

Legal Action - Your payday lender gets the right to utilize legal action under the court of law for writing bad checks. If the court proves you guilty of writing bad bank checks, you can spend pointless money and time. You must also shoulder legal professional fees, which is much bigger than your original repayment amount.