According to Money Super Market, when someone does not pay back a payday loan, interest and late charges are accrued and the debt will be sent to a debt collection agency. Payday lenders usually send the debt to a debt collection agency after a period of about two months.
Borrowers can talk to payday lenders and usually work out a payment plan, according to Money Super Market. Payday lenders also have the responsibility to treat borrowers fairly if the borrowers are experienced trouble paying back the loan. Consumers who feel unfairly treated should complain by writing a letter to the lender.Learn More
If a credit user defaults on an unsecured loans, he opens himself up to collectors who have a financial stake in collecting the debt according to Debt.org. Collection agencies are skilled at pressuring people to repay their debts, and some are not above violating consumer rights.Full Answer >
While it is possible to get a payday loan without a bank account, chances are that more information is needed in order for the lender to verify the applicant's income, says HowStuffWorks. The lender may charge higher fees for applicants who do not have bank accounts.Full Answer >
Asset Acceptance is a debt collection agency that buys consumer debt from other companies at a deep discount and attempts to collect the debt, often after the statute of limitations has lapsed. Formerly a subsidiary of Asset Acceptance Capital Corporation, the company was acquired by Encore Capital Group in June 2013.Full Answer >
A payday loan with a 2-week repayment structure has an average interest rate between 391 and 521 percent, according to the Center for Responsible Lending. Payday loans often lead to further financial distress because after paying the interest on the 2-week loan there is no money to pay other obligations.Full Answer >