What Will Happen If I Don't Pay Back Payday Advance?

Paycheck

A paycheck advance loan is a short-term loan designed to cover your expenses until your next payday. If you do not pay back the loan, you can face consequences

Fees/Interest

The interest in a payday loan is extremely high. Plus, if you are forced to extend the loan or default on it, you will face additional fees, which can be substantial.

Prosecution

For each the time the payday loan company deposits your check and the money is not available, you incur a non-sufficient-funds (NSF) fee at your bank. In addition, writing bad checks is unlawful in some states, and you could be prosecuted.

Credit

The lender has the right to report your failure to pay to all major credit bureaus, which negatively impacts your credit score.

Communication

If you cannot pay back your payday advanced as scheduled, speak with the lender as soon as possible.

Solution

If you inform the lender of your inability to pay, the lender might agree to make other payment arrangements to suit your budget, such as a partial payment to help you avoid NSF fees.

References

• Money Management International: How Payday Cash Advance Loans Work
• Federal Trade Commission: For People on Debt Management Plans: A Must-Do List