Payday Cash Loan: What Happens When You Can't Pay?

A payday cash loan is designed to provide you with funds between paydays. It provides a quick infusion of cash for a short term between paydays and is not to be confused with a traditional loan. A payday cash loan is really just an advance on your paycheck. But what if you can’t pay it back when it becomes due?

What Happens if I Can’t Make My Payment?

A payday cash loan is a credit transaction and like any credit transaction when your payment is late the payday lender has the right to charge you interest and fees associated with that late payment. You can expect those fees and interest rates to be much higher than you would pay with a traditional lender.

The payday cash loan company’s security is the post dated checks you provided or the permission for an automatic withdrawal from your bank account. When you signed your payday cash loan agreement you may have given the payday loans lender the right to electronically debit your bank account to cover interest payments and fees.

If there are insufficient funds to cover the withdrawal, your credit score can be hurt and you risk being prosecuted for fraud in some situations. However, you do have the right to stop payment on these electronic debits, anytime you like.



Rolling Over Your Payday Cash Loan

You are able to roll one payday cash loan into another for a fee. You need to be careful because you can find yourself in a vicious cycle where you must surrender your paycheck every week to the payday loan company with no hope of getting out of debt with them.

Payday Lender’s Rights with Your Payday Cash Loan

A payday lender can require arbitration for payment disputes. During arbitration the arbitrator may see fit to garnish your paycheck if you have failed to make your payday cash loan payment due date.

The Payday Lender’s Tactics Regarding a Payday Cash Loan

It is common for payday lenders to use unfair or even illegal tactics to collect their debt, and many times the payday loan customer has no idea they are not allowed the following practices:

• Threats of criminal prosecution because of default on payment – remember missed payments aren’t criminal.
  
  
• The threat of violence if a person does not repay their payday loan.
  
  
• Harassing phone calls to the customer, but also to their place of employment and their family members who can live anywhere in the country.

 The collection of the debt needs to be lawful and fair. Payday loan customers often have no other alternative to getting a loan, and payday cash loan lenders don’t access the borrower’s ability to pay. As a result the fees and interest rates are already terribly high.

There is no question a payday cash loan are a quick and easy way to get cash for an emergency but you should make certain that you will be able to make the payment. Otherwise, you’ll find yourself facing mounting fees and interest rates.

 

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