I Can’t Repay My Loans. What Should I Do?

When you are going to take a loan, your main task is to make sure that you have enough funds to repay it on the agreed day. But it can happen that one day you understand you can’t pay it back. Most of payday loans must be paid back in one payment. A payday loan default can easily lead you to the loads of overwhelming bank fees, collection agencies’ calls, visits with demands of money, bad credit history and even court cases.

Don’t think that it is not going to happen because your loan was just about $200-300.

When you see you will not be able to repay, go and talk with the lenders. Make together a new payment agreement. Remember that the lender can’t give you a new loan before you pay off the previous one.

Don’t feel scared. Know your rights and never panic. Payday lenders can’t threaten you. They have no permission also to bully you, if you say you are not able to pay – it is not a criminal case. It is prohibited to threaten with arrest or jail, but never ignore an order to appear in court, it can work against you.

Tell the lender that you are considering bankruptcy. This way, after the lenders heard the word “bankruptcy” they will understand how serious the things are and will try to find a solution.

Bu don’t forget to make your balance “0”.

If someone repaid your loans instead of you before, for example, friends or family, lenders can also take money from them.

Interest after the due date

After you failed to pay on the right date, the lenders will quickly send you a fee of late payments; and  the interest of your loan will also rise.

Collection Agency

If you see that you have no possibility to repay the loan – the lender will apply to a debt collection agency. Be prepared for collection calls and visits.

If it happens, think how much and how often you will be able to repay. Talk to the collectors about this. You pay the collectors and they will give the money to your lender.

If you don’t like the behavior of a lender and the rules provided, you can send a letter of complaint. If it is ignored you, write to the Consumer Financial Protection Bureau. They control the relationship between loans and borrowers. They can also solve your arguments. Knowing your rights is your best weapon.

Cancel payments

If there is some money on your bank account but you need to use it to pay for an important bill, you are able to stop the loans being taken from your bank account. You have to visit your bank and ask them to annul the payment.

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