Payday Loans, Why You Should Never Default On Them
March 19, 2009 by Tim Kolstowski
Filed under Payday Loans
A payday loan is a way out of a tough spot in your cash flow. Maybe you can’t use a credit card for some reason. If so, you can take out a payday loan for some quick money. The money you get via the paycheck loan can be utilized to pay off your bills and you use your next paycheck to pay off the paycheck loan plus interest.
A payday loan is perhaps the quickest type of loan, but it does have very high interest rates. Because of these high interest rates, use them only for emergencies. If you can loan money from another source, it’s almost invariably cheaper. The interest rates of a payday loan are high from the starting point and will get a lot higher if you don’t pay back on time.
Not paying off your paycheck loan is a bad idea. Payday loan conditions are prepared in such a way that interest rates go up dramatically the second your payment is overdue. Trying to skip out on paying can have serious results. That $300 payday loan will turn into a nine hundred dollar debt in a very short time span.
If you decide not to pay, you will have to explain your position in court. A payday loan lender will spare no trouble or expense if you don’t pay up. They’ve seen this before. It is highly probable you will lose in court. This means extra costs on top of your paycheck loan debt. Your $ 900 obligation just became a $ 2.500 obligation.
If you can’t pay immediately, the judge will give the lender a lien on your home. The lien will be put on your personal property if you don’t own a house. Have no doubt that a payday loan lender will do whatever it takes to get his money. It may even land you in prison in some states.
Be sure you can pay off a payday loan on time before you sign the contract. Don’t just close a paycheck loan out of financial dire straits, because everything will get even worse when you don’t pay it off on time.
