Taking a payday loan is easy while paying it can be hard. Because of the many changes in life and career insecurity many people have found themselves in financial trouble of defaulting on their payday loans. If you have, or haven’t been in this situation before, here is a sneak preview of some of the penalties that come with payday day loan defaulters:
Defaulting on your payday loan can have massive consequences on your financial stability. These days, when you refuse to pay your loan or come short of the loan deadline, most lenders take the step of not only pestering you with calls but forward your name to loan agencies meaning that you will not be allowed to secure any loan from cooperatives, lending agencies, including banks.
If you are lucky and manage to pay the loan, you may have to stay away from incurring more payday loans as your record stays on the credit report for some years.
Though among the last resorts, a lender may take you to court for failing to honour your payday loan. In case this happens, you should try and clear your debt as soon as possible as a judgement in favour of the lender means that you may have to part with some of your property.
High Interest Rates
Once you default on a payday loan, the longer you stay without paying, the higher the interest rates. If you don’t plan to pay, you may easily find yourself owing almost twice the amount you owed the lender. Depending on your country and county, there are some countries and counties that limit the interest rate charged by lenders.
Payday loan legislations vary from country to county and state to state. To be safe, do a thorough assessment of your financial needs and capabilities before incurring a payday loan. You can check out Acta.fi for more information on payday loans.