A payday loan is a credit that you take to cover your emergency needs and must pay back in full by your next payday or on an agreed upon date. In most cases, the lenders debit the full balance from your bank account using a post-dated cheque that you signed when first accepting the loan.
Late Fees, Interest Fees, and Account Freezes
Most lenders will penalize you with a late payment fee if your account does not have money by the due date. From this point, your cash will continue to accumulate interest at a given percentage each day. Unfortunately, some lenders do not give exact fees of the late payment charge of payday loans. The law requires the lender to freeze charges and interest after 60 days of non-payment, but this depends on where you live.
Debt Collection Calls
If you do not pay up within about two months, your payday loan lender will hand over your file to a debt collection agency. The agency will call you, send you letters, or even visit you to demand cash. You are given a chance to draw up a plan on how you are going to pay back your loan, but if you still cannot afford repayment, the collector may institute legal action to have you pay.
Plummeted Credit Score
Not paying back your payday loan may get you a negative rating with the credit bureaus. Also, it may make it harder for you to get credit or make large purchases in the future. Unfortunately, the short repayment period for payday loans can easily get you trapped in a spiral of mounting debt that gets harder to repay with each pay cycle. If you get into such a problem, it’s a good idea to seek help from debt consolidation professionals.
A Way Out of Payday Loan Debt
At Progressive Debt Relief, our debt consultants have worked with negotiating and settling payday loans for many years. We can negotiate with the lenders on the best terms to help you settle your payday loan without undue pressure, put an end to harassing calls, and help you restore your credit. To get your finances back on track, contact us today 877-590-1847 for a free consultation.
