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
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
A loan agreement is a document that binds a borrower to a lender, whereby the borrower accepts to pay back the money in compliance with stated terms. The document is a compilation of various promises made by the involved parties. The agreement usually protects the lender, as it is a legal document that expects the borrower to adhere to the terms and conditions.Full Answer >
With a title loan, a borrower gives a lender the title to his vehicle in exchange for a small amount of money for a short period of time. Title loans are often some of the most-expensive loan options, because of the additional fees and high interest rates.Full Answer >
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 >
The loan disbursement fee is charged by the lender when student loan funds are given to the borrower. It's also called a loan or origination fee, states the Department of Education. The fee varies by lender and is usually calculated as a percentage of each loan disbursement.Full Answer >