Q:

What happens if you default on a loan from the Payday Loan Store?

A:

Quick Answer

When a borrower misses a payday loan payment, the lender can charge a fee for the missed payment and make an attempt to collect the debt. The lender may cash the check it has on file, which could trigger the check to bounce at the debtor's bank, states Washington Law Help. Payday lenders may decide to send a defaulted account to a collections agency.

Know More

Full Answer

Defaulting on a payday loan can cause a lot of financial difficulties for the debtor, as lenders act quickly to collect the money, according to Washington Law Help. Fees and costs of trying to recover the funds can pile up. Borrowers in this situation sometimes are forced to close a bank account because of excessive fees that cannot be paid. Debtors also can expect to receive phone calls and letters from a collection agency regarding the unpaid loan. According to Credit.com, a settlement amount can sometimes be negotiated to resolve the debt.

Declaring bankruptcy is a drastic step, but it can free the debtor from the defaulted payday loan, states Credit.com. It is a myth that payday loans cannot be included in a bankruptcy, add Credit.com. This type of unsecured loan can be discharged the same as regular loans.

Learn more about Personal Loans

Related Questions

  • Q:

    What is a payday loan?

    A:

    A payday loan is a short-term loan, usually $500 or less, that borrowers are expected to pay before their next payday. Payday loans are an option to fund unexpected purchases that arise before the end of the month.

    Full Answer >
    Filed Under:
  • Q:

    How do you qualify for a subprime loan?

    A:

    For a borrower to qualify for a subprime loan, a verified income and a down payment of at least 5 percent on the home are required, according to Stephanie Mojica for SFGate. A subprime loan is offered at a higher interest rate to individuals who do not qualify for prime loans.

    Full Answer >
    Filed Under:
  • Q:

    How do you get a payday loan?

    A:

    Obtain a payday loan by researching different lenders in your area. After selecting a lender, complete an application, and provide the required documentation. Review the loan terms upon approval, and then sign the required paperwork.

    Full Answer >
    Filed Under:
  • Q:

    What is meant by "payday loan consolidation"?

    A:

    The phrase "payday loan consolidation" means that a consumer with multiple loans has the option to combine these into a single one. This is often done by working with a payday loan consolidation company that pays off the consumer's payday loans. The consumer then pays one monthly payment to the payday consolidation company. This practice is very similar to debt consolidation.

    Full Answer >
    Filed Under:

Explore