What happens if you default on a payday loan?

Answer by  mrsnanaboat (15)

The postdated check that you gave the loan company as collateral for the loan will be submitted to your bank for payment. If it is returned, you will have fees from your bank due to a bounced check. The interest and late fees on your payday loan will continue to accrue until you take care of it.

Answer by  Sarah (39)

Whatever you used as collateral will be seized, usually they give you the loan based on your car title. They will prompt you to pay at first then, use a collection agency, and try to seize property as the last resort.

Answer by  nits28 (23)

Call your bank immediately to discuss on making up the payment. If not, they will begin collection process which,they will start calling you & you would have default notices.

Answer by  John (9008)

Defaulting on a payday loan is the same as defaulting on most other loans. Your credit rating will suffer. The company will put you in collections and could sue you.

Answer by  nuhuskies (22)

It would ruin your credit and the person that co-signs the loan would be responsible for paying for the balance of the loan.