If you are struggling for cash after receiving an unexpected expense or bill, you may find yourself needing a payday loan or other form of short term loan to get you through a difficult patch. No matter what state you are in, whether Texas, Ohio or anywhere else in the US where payday loans are available if you have a bad credit rating, Kallyss can help you find the best payday loan for your circumstances.
However, it is important to note that if you are unable to keep up with repayments then there will be consequences which could include being summoned to court by your lender. It is true that you can go to court if you fail to meet loan repayments; your lender can decide that this is the route that they would like to go down however it is becoming less common. Many people who borrow money are often nervous about what may happen if they don’t repay their loan on time and if they could end up in court.
Payday lenders will usually only take you to court as a last resort and try different avenues, spoken about in this guide before they will summon you to court. This could happen no matter what the loan type is, including installment loans.
Before taking out a payday loan it is important that you understand the risks associated with taking out the loan and that you have considered alternatives to payday loans, which may lead you to look for other solutions like borrowing from family and friends or ordering your finances in a way to unlock some more money in the short term.
In this guide Kallyss will take you through what happens if you cannot repay your payday loan on time and if and when you will be summoned to court for failed repayments.
What Happens if I Cannot Repay My Payday Loan?
If you cannot repay your payday loan on time then your lender may well begin to take action against you. This will be small at first, they will more than likely send you many follow up emails, calls and letter in order to encourage you to repay as quickly as possible.
If you have simply forgotten to repay, these will serve as a reminder and allow you to pay without any consequences or fines. However, as more time goes by, lenders will begin to take harsher action because they would like they money back. It is important to remember that whenever you borrow money online, repaying your loan plus interest is very important at all times.
If you do not repay your payday loan on time and do not respond or engage with lenders as they try to get in touch with you, they may start to add on additional fees and charged, which can take the form of late fees and added interest which will begin to build and only grow bigger the longer it takes you to repay the payday loan. If you do not repay on time your payments can end up being much larger than you originally anticipated and land you in bigger financial problems, even potentially leading you to bankruptcy.
Not repaying your loan on time will severely negatively affect your credit score and will lead you to struggling to find credit or loans elsewhere in the future when you need.
What Should I Do If I Cannot Repay My Payday Loan?
There are some steps that you can reasonably take if you realize that you cannot repay your payday loan on time, especially if you realize before the repayment date that you need more time.
If you find yourself in this situation, the first and most important thing to do is to phone your lender and let them know. Speaking to your lender will inform them of the situation so that they can deal with it in the best possible way for both parties. This could include giving you more time to make the payment or find an alternative way to pay off your debt.
The longer that you wait without speaking to your lender, the worse it will be; the lenders want their money and therefore will be willing to help you to make sure that they are paid and do not have to go to court which is a hassle for both parties.
If you are big financial trouble and there are people relying on you, then there are places such as legal aid centres, bankruptcy attorneys and credit counsellors who can help you find a way out of your financial problems.
This also doesn’t just apply with payday loans. If you borrow any amount of money, whether in the form of a $1,000 loan, or even if you just borrow $400 or another small amount, by not repaying your loan on time and particularly if you do not get in touch with your lender as soon as you realize you may not be able to pay them back, you run the risk of them taking further action. No matter what loan and how much you borrow, always make sure the lender knows if you re struggling to repay what you owe at any point.
Can You End Up In Court If You Don’t Repay Payday Loans?
In short, yes, you can be taken to court by your lender if you fail to repay your payday loan. Lenders will sue you to collect the money if and when you fail to repay them after a lengthy period of time. If you do not dispute the claim then an order will entered against you by the court and you will be ordered to find the money and pay it back by whatever means possible as soon as possible.
That is why it is so important to consider everything before taking out a payday loan and to make sure that you will be able to pay it back on time as agreed in the contract.