Payday loans are a form of lending in which the loan provider asks you to pay back the loan in full by your next paycheck. These unsecured loans can be easy to get in times of need for the average, working consumer, but they can carry a high price. If you fail to return the cash from your payday loan, you will experience harsh financial consequences. Here are some examples of the outcomes you could experience.
Expect greater fees
In addition, failure to pay your payday loan leads to exorbitant interest rates and additional penalties. Te longer that it takes for you to return the funds, the higher your fees will become. If these fees continue to build, the cost can actually end up larger than your entire paycheck. If you only have an amount in your bank that is less than the amount of the loan, they may overdraft your bank account.
A lower credit score is one of the consequences of not returning the payday loan funds. Your credit score will be negatively impacted for years to come due to the loan debt. The resulting implications can prevent you from securing a home or auto loan in the future, even at a stage in your life when you are more financially secure.
A payday loan lender is more than happy to give you money in an emergency, but they will not hesitate to harass you consistently if you do not pay up. The amount of harassment that an individual endures for financial delinquency can be very distressful. In addition to your bank information, the provider usually has your address, work information, and your home and cell phone numbers. Some payday loan lenders even collect a few reference numbers of family and friends, so they could be harassed as well if you avoid your financial obligations. Your account will likely be referred to a collection agency, and the payday loan lender may even take legal action against you.
A payday loan is a great asset when it is used properly, but it can place the nails in your financial coffin if you fail to perform on your end. Whether you get your payday loan online or in person, it is imperative that you pay your loan back in full and in a timely manner. The disadvantages of not paying back your payday loan far outweigh the advantages of getting a payday loan in the first place.