You’ve looked into payday loan online, you’ve found the best lender, and you’ve taken the plunge and applied for the loan – but – what would happen if you defaulted? That’s a question on many borrowers minds simply because you never know what’s around the corner. You may have every intention of paying the loan back, but for whatever unforeseen circumstance that changes. So, if you were to take out a payday loan but defaulted, what potentially could happen?
Calls and Emails
When payment is due the payday lender will attempt to get their money back in a number of ways. Depending on the lender and how you agreed to make payment, the lender may go directly to the bank to get the sum of money back. However, if there is no money in the bank to cover the cost of the loan, the bank won’t be able to issue payment. When that happens, the payday lender may call you and request payment. Some lenders may email you stating it’s time for payment and please pay the loan. However, payday loans and their lenders may also try other tactics to contact you so that they get paid.
Penalties and Debt Collection Agencies
Within sixty days of the payment date passing, the lender will then look at adding further interest and loans fees as they will essentially roll the loan over to the next month. However, once the sixty days are up, they will incur additional penalty fees and turn the debt over to a collection agency who will then attempt to recoup the payment. Even with payday loans online and there is a default the lender will still turn the debt over to a collection agency so that they can get their money back. Once the collection agency has the debt they will make attempts to recoup the money. The agency may call you throughout the day, email or visit your home in attempts to get the money back.
When You Default, It Impacts Your Credit
Whether you pay after the default has been issued or refuse to pay point blank, as soon as the loan is entered as a default, it will appear on your credit report. Remember, payday loans aren’t actually entered on your credit history and that means if you pay them back successfully they won’t impact your credit either way. However, when you default on the loan, you will find it impacts your credit. This is something most borrowers aren’t aware as they think their credit will go unaffected, but that’s not the case.
Defaulting on a loan is one of the worst things you can do. You may have debt agencies after you, not to mention the fact your credit may be ruined. It’s not pleasant to default, but it does happen, and that’s something you have to be aware of. If possible, avoid defaulting at all costs simply because it may prevent the situation from getting any worse. Of course, that doesn’t mean to say it’s possible to avoid a default. Whether you choose payday loans online or a physical storefront lender, do what you can to make payment and avoid a default otherwise it can ruin your credit. Check this: http://www.amerusa-login.net/are-online-payday-loans-right-for-you/.