What Happens if I Don't Pay a Payday Loan?

Written by luke arthur
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Payday loans are a very easy way to get access to the cash you need when you have money problems. This type of loan typically does not use any collateral, and because of this, some people do not make their payments as scheduled. If you avoid paying a payday loan, you will have some negative consequences to worry about.


The purpose of a payday loan is to provide short-term loans for those who have a shortage of money. With this type of loan, you borrow a small amount of money, and you are supposed to pay it back with your next paycheck. The only requirements for the loan are that you have a job and that you do not have any prior loans outstanding.

Late Fees

If you do not make your payments on time for the payday loan, the lender will most likely charge late fees. These fees can be substantial, and sometimes they can add up to more than the actual amount you borrowed. The fees will be outlined in your contract. They could be a flat amount or a percentage of the total amount of money you borrowed.

Collection Agency

If you do not pay back your payday loan, the lender will turn your account over to a collection agency. The agency will then be in charge of trying to collect the balance from you in full. It may employ techniques like sending you notices in the mail or calling you on the phone. The agency will make every effort to get you to pay and will be paid by the payday lender to do so.


If you still do not pay your bill after having a collection agency try to collect it from you, the payday lender will most likely take legal action against you. It can file a civil lawsuit to try to get the money you owe. You will receive papers from your local court that tell you to be in court on a certain day. The court could choose to garnishee your wages or require you to make a certain payment to the lender.


If you do take out a payday loan, it makes sense to try to pay it back in full. The interest rates on these loans can be very high, and if you do not make your payments, the interest can accumulate quickly. Regardless of what your excuse is, the court will not be forgiving if you skip your payments. This can turn into a long-term legal battle that you probably cannot win. It is best to avoid this situation and pay your bill.

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