Why are payday loans bad?
They are considered by many as bad because many are designed to trap you to be on a continual cycle of debt. Usually, payday loans that are quicker and easier to access also tend to have higher fees; that’s why it’s imperative to pay the debt off in full in your repayment terms. Payday loans are also not a long-term solution; they really are just a quick fix in an emergency, but one which must be settled almost immediately, otherwise you won’t win. They never really help to minimise long-term debt. There are also some payday loan providers that make signing up sound so easy and simple and yet they aren’t honest with you at all. If your loan deal sounds too good to be true, believe it, and rather be concerned than happy.
Lots of people who borrow money like a payday loan get scared if they can’t repay their loan on time. They need to remember that payday lenders don’t have the right to bully them or threaten them and people can’t even be arrested if they fail to pay a payday loan back. It is not a criminal offence in South Africa. But the lender probably will take you to court though if you don’t pay, and then if you are summoned to court, you must appear.
What happens if you get a payday loan and close your bank account?
If you close your banking account so that the payday loan lender can’t draw out the required funds to pay it off, they will keep on trying anyway, but believe it, they will get the money back and you will be the one at a loss because you will be incurring more bank fees. Eventually, the lender might send your loan to its collections department where you will end up paying even more costs and fees.
Do payday lenders take you to court?
Sure, because they will want their money back according to their agreement with you. So the short answer is yes, and they will sue you in court too if you default on your debt and are in violation of the agreement you made with them. OK, they can’t take you to a criminal court but they will sue you for the money in a civil court.
How do I get rid of a payday loan legally?
- You can get rid of the payday loan by taking a new and less expensive loan.
- Take the money out of your savings and get rid of the payday loan debt.
- If permitted, arrange for a repayment settlement plan with the current payday loan lender.
- You can consolidate your debt so just one payment of all your debt is made.
- Banks can help you to get your debt under control.
Can I stop payday loan lenders from debiting my account?
You can stop instant online payday loans Defiance electronic debits to your account. You have the right to stop a payday lender from taking automatic payments from your account even if you arranged with them that they could. But that does not mean you stop making the payment!
If I don’t pay my payday loan, what happens?
Thing is, a payday loan will come with very high-interest rates and fees, sometimes making them impossible for people to repay. If you are unable to pay back a payday loan, your account will probably get sent to a collection agency, and from there to an attorney’s office even – all these procedures will damage your credit.