Payday loans are great for emergencies, but what happens if you cannot pay them back on time. Failing to pay back a payday loan comes with circumstances. Learn about these circumstances here.
Paydays loans can save the day when you are in need of cash urgently, but what happens if you cannot pay back the loan on time? Paydays loans have become increasingly popular as they are designed to help those in need of cash urgently. You do not need a good credit score to qualify for this loan; all you need is proof that you have a job, perhaps an active bank account, and are over eighteen years old. However, it does come with a fee and an interest rate, which is transparent to all the borrowers. There may be situations when the borrows cannot pay on time and miss the deadline, so what are the consequences of such situations? Let’s take a look at what happens when you miss paying your Payday Loans on time:
Your Interest Will Add Up: When you miss your loan repayment deadline, your interest will increase, so you will have to pay more than what you would have if you paid on time. And if your account has an insufficient balance for the transaction, the lender will charge a fee for it as well. So, not only will your interest add up, but you will also have to pay an extra fee.
Third-Party Debt Collection Agency May Get In Touch With You: If you do not pay the debt within 60 days, the lender will probably connect with a third-party debt collection agency to get the loan back. So, if you cannot pay back within 60 days, expect a debt collection agency to get in touch with you. The agency will probably call and send emails until they receive the cash, but make sure that you do not get harassed by such agencies, as their method to collect the loan can be a little feisty sometimes.
You May See A Dip In Your Credit Score: If you do not repay your loan on time, you will likely see a dip in your credit score. Since a bad credit score can affect you greatly in many ways, you should try to avoid putting yourself in such situations. You will end up in such a situation if your debt gets in the hands of a third-party debt collection agency. However, if you repay on time, this will not be a situation.
You Could End Up In Court: If you are extremely unlucky, you could end up getting summoned to the court even if the loan you took out was small. The debt collection agency could take you to court, so your best bet would be to pay back the loan as soon as possible, preferably within the set time. To avoid getting into such a situation, get in touch with the lender and set up a different payment option.
It May Be Difficult To Secure Other Financial Loans: When you do not pay back the loan on time, it will leave a mark on your credit report, which will stay there for about seven years. When you have a bad mark on your credit report, it becomes difficult to attain other loans as you will likely get disqualified from most lenders. And it will be extremely difficult to secure a loan.
These are some of the reasons why you should pay back your Payday Loans on time. If you cannot, due to some circumstances, get in touch with the lender and set up a different payment option.