When the time comes to look to take advantage of a pay day cash loan, then it will certainly pay if you spend some time trying to learn everything about what happens when you don't pay back a pay day cash loan. Lenders have set out certain criteria regarding who can apply and what amount of money they can borrow.
These credit transactions are given out for as little as a few days and for as long as a few months. It all depends on the borrowers financial position and their ability to repay the borrowed money. However, they will have to pay a high rate of interest because this kind of credit is very easy to obtain and does not require credit checks or having to put up collateral.
Before you take a pay day cash loan it is important for you to understand that if you fail to repay the money that you have borrowed then you will need to pay a very high penalty. The lender will ask you to sign a contract in which the terms of the agreement to lend you money will be spelt out.
There is sure to be a clause or two related to what the lender can do in case you default. The clause will mention that the lender can charge you late fees and even raise the rate of interest and even charge interest on the amount that you have to pay by way of late fees.
The lender also has another option which is that of asking a debt collection company to recover the amount that you owe the lender. It is up to the debt collection agency to choose any method that they feel will help them recover the money from you.
Lenders can also choose to take legal action against the defaulter. In case they take you to court and they win the case, then you will have to pay a lot more than the sum that you owed in the beginning. The only good news is that if you do not repay the loan, you will not be sentenced to serve a jail term.
There are also many states that have passed laws that prohibit a pay day loan company from charging exorbitant fees. These states may also put a cap on the interest rate that the lender can charge borrowers and the same applies for the amount of money that they can charge as late fees. In addition, these states can also put a cap on the amount of money that you can borrow from a single loan company.
To obtain a pay day cash loan, you will have to fill out an application and send it to the lender. To qualify for such credit you will need to have a checking account that is not less than three months old. You will also need to show that you are currently employed and that you have a regular source of income and that you are a resident of the state in which you are applying for the loan. You need to be at least eighteen years old and a citizen of the country in which you are applying for credit.