Before applying for a payday loan, it is important to get accustomed with all the terms and conditions. This is one of the things that many people do not take into consideration. Failing to pay loan on its due date as mutually agreed by both the parties can put you at a risk. To save yourself from any bad repercussion, it is important to understand the consequences as stated in the policy contract.
Your debt can be sold to the collection agency
On failing to pay the payday loans for bad credit and not finding any alternate solution for this issue, it can be possible that your loan lender will inform the collection firm. This information will then be shared with the central credit bureau. So, to avoid any contacts with collection firms, it is important to make the loan repayment on time.
Chances of getting sued in the civil court
Your lender of payday loan has all the authority to begin the court judgment in against of you if you don’t get the loan repayment. The court can permit the lending firm to recover the debt by way of selling your property.
You will be charged with higher fees and interest rates
The longer you take time to repay the money, more will be the fees charged to you. It is possible that the annual percentage rate of payday loan by go up to 300 and above. This nonpayment can result in a large sum of money, that can be larger than the amount you had borrowed.
Ways to deal with the consequences of nonpayment of payday loan
You must study the way the entire system of the working of payday loans to figure out the tiniest detail related to it. If you realize that you have a very strict budget and the loan repayment can hurt you, then you must quickly inform your loan lender to arrange for a new repayment plan.
A few states even allow to use rollover options or extension when not being able to pay back the loan on time. There are some states that use practices like charging extra fees etc. In any of these cases, you must pay your loan off quickly using the most appropriate method.
So, these are the step by step list of stages that you must expect on missing your repayment date. Make sure to know these conditions before applying for this loan.