People go broke and borrow money for many reasons; you may work but still need to pay an emergency expense, a situation where your paycheque may not help. After all, that may happen after you have used up all your salary. While they are great for borrowers in need, payday loans carry great responsibility with them: receiving the money from loan lenders is great, but you must not forget that you have to pay it back. Imagine a large amount of money to have your car repaired or to pay your house rent yet not be able to repay it on due date. What could the consequences be? What happens if you don’t pay a payday loan in Canada? In fact, many payday loan borrowers are worried about this. You, too, may be fretting over this problem.
So, What Really Happens If You Don’t Pay a Payday Loan in Canada?
If you have borrowed some cash from loan lenders in Canada, you should be prepared for at least the following if you fail to pay your loan on time. There could be other unforeseen consequences as well:
Your Bank May Charge Your Account Overdraft Fees
When you have the due date for your loan repayment, the lender can collect your debt on your bank account. Now the question is “Is this a problem?” Well, while your lender does succeed to get their money from you as there is no sufficient amount, you may get in trouble with the bank. The lender will just keep on collecting your debt. On the other hand, your bank may charge you overdraft fees on seeing that your balance is not sufficient when your lender makes an attempt to withdraw their loan amount.
Your lender may not trouble only you; they can use any information you provided to them during your loan application. The lender will use this information to contact you for repayment of the loan amount agreed.
Failing to Repay Your Payday Loan in Canada Can Get You in a Debt Spiral
Upon failing to pay off their one debt, many payday loan borrowers prefer taking out another loan so as to pay their first loan. Why should you seek to pay a loan with another loan? As strange as it seems, this happens. If you have not risked your financial life by borrowing another payday loan, then you are still in a salvageable situation. “What’s wrong with borrowing more cash to pay your first loan?” You may ask. The problem is that, by borrowing another amount of money, you are putting yourself in a trap called payday loan tornado or a debt spiral. So, instead of defaulting on just one payday loan, you are burying yourself in yet another debt. This way, you won’t be improving your financial situation. You will be making it even harder to pay off your debts.
Final Thoughts About Not Paying Payday Loans In Canada
Therefore, you should avoid defaulting on your payday loan and borrowing another amount in an attempt to pay your first debt, as this can just worsen your financial situation. Could you run a risk of defaulting on your one payday loan, you should contact your payday loan lender and discuss your repayment terms. Who knows? They may help you with some new payment plan to avoid having debts sent to debt collectors. This is what happens if you don’t pay a payday loan in Canada.
