You have to realize that a payday loan has to be paid back. There are consequences if you don’t.
Payday loans can provide quick emergency cash for people who don’t have access to credit cards. But, they come with high interest rates. If you take out a loan for a couple of weeks so that you can fix your radiator and pay the loan back when your next paycheck comes in, you’re okay. You will pay a high interest rate for a couple of week’s worth of money, but in an emergency situation like this, payday loans can be a godsend.
Additionally, you should know that in some jurisdictions, you can be arrested for not paying back a payday loan. You could never be arrested for failing to pay off a credit card, so why does defaulting on a payday loan land you in jail?
The simple answer to this is that to secure a payday loan, you wrote a post dated check. In some places, you can be arrested for writing a bad check. It is very important to check the fine print on the contract you sign when securing the loan.
One, your interest will continue to occur as contracted in the loan agreement, and that amount can be very high, and in some cases several hundred percent. This means that if you don’t pay, you will be liable in civil court for the damages, and those could be very high. Some states even impose double damages so the legal stand point is very risky and most likely the lender will win, especially if the contract is legal and valid in the state it was issued. The second part of this is whether or not a person can be arrested. Some lenders threaten to call the police on people that don’t repay their loans, but in most states this practice is also illegal, and if a lender does threaten to have a person arrested for not paying a loan, then that person should immediately contact their state’s attorney for clarification.
Just be aware of what happens if you don’t pay a payday loan.
