A paycheck loan is a way out of an emergency cash situation. Maybe you can’t use a credit card for whatever reason. If that’s the case, you can get money within 24 hours with a payday loan. The money you get via the payday loan can be used 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 quickest type of loan, but it does have very high interest rates. That’s why you need to use them only in emergency situations. If you can loan money some other way, it’s almost always less costly. The interest rates of a paycheck loan are high from the starting point and will get considerably higher if you don’t pay back on time.
Not paying a payday loan off on time is a very bad idea. The interest rate will rise dramatically the second your payment is late. Trying to skip out on paying can have big consequences. That $300 payday loan will morph into a $900 debt in no time flat.
If you determine not to pay that amount of money, the lender will go to court. A payday loan lender has been in these situations before, so have no doubt that he will go the whole nine yards. . If the judge decides the paycheck loan must be paid back, which is highly likely, you will have to pay back the loan, plus interest, plus extra costs for court. Your $ 900 debt just turned into a $ 2.500 obligation.
If you can not pay that amount of money, the lender will get a lien on your house. If you don’t own your own home, a lien is put on your personal property to pay back the financial obligation. Paycheck loan lenders will do whatever it takes to collect their money. It may even land you in jail in some states.
Be sure you can pay back a paycheck loan on time before you send in the contract. Don’t just close one out of financial desperation, because your situation will get even worse when you don’t pay back on time.