Failing to pay a payday loan can have serious consequences, such as additional fees, collection calls and damage to your credit rating, or even a day in court and your paycheck being garnished. These small loans, also called cash advance loans, check advance loans, or deferred deposit loans, are often a stumbling block for consumers. If the payday lender (or the collection agency, in fact) can't convince you to pay through the usual collection tactics, such as phone calls and letters, the payday lender might decide to file a lawsuit against you to get a ruling on the balance of the debt. California law limits interest, fees, the amount of transfers, and other penalties that immediate payment lenders can charge.
The purpose of this type of loan is to settle several debts with a single loan that has a monthly payment that fits your budget. Follow the state information link for specific regulations for payday lenders in California. If you think this lender is violating California payday loan rules by charging excessive fees or interest or violating state collection laws, you can contact the California Department of Business Oversight to file a complaint. Over time, your loan may pass into the hands of a debt collector, who will contact you to have the loan repaid in full.
Getting your quick loans in order is a big step in rebuilding your finances and getting out of debt. If you haven't repaid your quick loan for a few months and you've collected it, you might start to receive a lot of calls and letters to learn about the payments. In addition, many state laws require quick-pay lenders to offer extended repayment plans (EPP) that allow you to repay your loan over a longer period of time. The loan can cope with the emergency, but the other expenses of life are still there when the loan expires and many people run out of money.
If you don't pay back a quick loan, you'll have to work hard to rebuild your credit and overcome this financial hurdle. If you don't repay loans on time, you'll face aggressive collection methods, additional fees, a potential court ruling, and a deterioration in your credit rating. This can be especially true if you don't have the best credit and can't get approved for other types of loans. It's difficult to repay a quick loan and cover regular expenses, so quick loans often force borrowers to apply for another high-interest loan over and over again.
You can use a personal loan to pay off your fast, high-interest loan and then pay it back on a schedule that works best for you.
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