Failure to pay back payday loans has very unpleasant consequences for the borrower. He must reckon with the fact that the institution in which he incurs debt will demand repayment and use various debt collection tools. These are very different and what will be used depends on many factors. What are the consequences of not repaying a quick loan? No funds to pay back the loan – what to do?
Loan companies always want to get the money back. This is why, with delayed customers, they try to reach an agreement at the beginning and do not immediately proceed to hard debt recovery. If you do not have the means to pay back the loan on time, you can choose to postpone the payment. The loan agreement says whether refinancing is possible. It also specifies the cost of postponing the loan. People who have problems paying back payday loans should always contact the Funding Square Bank, even if it has already started the debt collection procedure. Avoiding contact causes even more problems.
See also how to pay off payday pay if you don’t want to get into debt.
Late loan repayment – consequences
The first consequences of non-repayment are already on the first day after the deadline set out in the contract. At the beginning, the loan company charges the maximum possible contractual interest for late repayment. Thanks to the introduced act on payday loans, currently the maximum percentage is 14% per annum. In addition to the penalty costs, the loan company launches an internal debt collection procedure, which aims to effectively and quickly recover the outstanding loan repayment. Internal debt collection procedures include sending reminders and reminders through various communication channels. Apply among others SMS messages, emails, registered letters, telephones. Persistent avoidance of payday payback also means negative entries in the databases, which results in deterioration of credit history and problems with taking another loan, loan or inability to purchase in installments.
External debt collection
When internal debt collection fails, the loan company decides to transfer the case to external debt collectors. The debt collector contacts the unreliable borrower by phone or in person and he is intensively seeking repayment of the loan. When that doesn’t work and the borrower continues to evade its obligations, the case will be referred to court.
Settlements regarding overdue obligations are usually carried out by means of the EPU, i.e. Electronic Reminder Procedure. Its completion is the issuing of a 14-day payment order. Ignoring a court order means bailiff execution. A civil servant can seize real estate and other movable property, e.g. salary, benefits and other account receipts.