A payday loan is a way out of a tough spot in your cash flow. Maybe you can’t use a credit card for some reason. If so, you can take out a payday loan for some quick money. The money you get via the paycheck loan can be utilized to pay off your bills and you use your next paycheck to pay off the paycheck loan plus interest.
A paycheck loan is perhaps the fastest type of loan, but it does have very high interest rates. Because of these high interest rates, use them only for emergencies. If you can loan money from another source, it’s almost always less costly. Not paying back on time will increase the high interest rate of a payday loan even more.
Not paying off your paycheck loan is a bad idea. Payday loan conditions are prepared in such a way that interest rates go up dramatically the second your payment is overdue. Trying to skip out on paying can have serious results. That $300 payday loan will turn into a nine hundred dollar debt in a very short time span.
If you decide not to pay, you will have to explain your position in court. A payday loan lender will spare no trouble or expense if you don’t pay up. They’ve seen this before. It is highly probable you will lose in court. This means extra costs on top of your paycheck loan debt. Your $ 900 obligation just became a $ 2.500 obligation.
If you can not pay that amount of money, the lender will get a lien on your house. The lien will be put on your personal property if you don’t own a house. The payday loan lender will get his money one way or the other. It may even land you in prison in some states.
If you’re thinking about getting a paycheck loan, know beforehand how you’re going to pay it back. Don’t just close a payday loan out of financial desperation, because your situation will get even worse when you do not pay it off on time.
lening oversluiten and
lening in Dutch.