How Do Payday Loans Collect?

How do payday loans collect? If you’re wondeing how do payday loans collect, you’re either late on paying them back, or you’re looking into the future and seeing that you won’t be able to repay it. Either way, it can cause some stress wondering how they’re going to try to get their money back. A lot of it depends on what type of lender you went with, and how much information you gave them.

If you’ve had other bad experiences with bill collectors, you might think that payday lenders will be the same way, and will pester you non-stop to get their payment. But many lenders do not want to make you too upset, because they want you to eventually pay back your loan and re-loan with them. That’s why they’ll be firm, but gentle. They do not want to lose a potential customer.

There will be a sort of feeling out process as they size you up and try to determine whether you plan to pay them back or not. They are also trying to determine if they want to reloan to you again, or if it is too risky and they might not get their money back one day.

How Do Payday Loans Collect? Answer: Any Way They Can

A payday lender will typically exhaust all avenues available to them, in order of most civil to least civil. They will first try to cash the check that you wrote out to them, if you went with an offline lender. If they can’t get the money that way they will try to contact you. If you are unreachable, they may end up visiting you at your home, and can even show up to your workplace to talk to you.

Online Lender Tactics

Online lenders can be a bit more brutal, and least to your checking account. You likely gave them your checking account information in order to receive the money, and they will try to withdraw their money on your payday, electronically. If it isn’t there, you’ll get an overdraft fee from your bank, and still owe them their money. Some rotten companies will keep trying multiple times so that you keep racking up fees at your bank. It’s pretty much a good way to close down your checking account.


Other Practices

Some payday lenders will report your nonpayment to the major credit bureaus, but this is not usually the case. Others will take you to court, but this is also a sort of last resort. In most instances they just want their money back, and they won’t take on a bunch of late fees or other fines. This means that as long as they can’t get to your money in your bank account, you are pretty much free to pay them off on your own time frame, just don’t take so long that they start lawsuit procedures.

What They Can’t Do

In all instances there are certain things that a payday lender can’t do to get their money. They can’t send thugs to your home and threaten to break your legs if you don’t pay them back. So in that instance you don’t have to worry too much. They also must adhere to collection practices that fall within state and federal guidelines, so they can’t call you multiple times per day, and you should keep a record of all of their collection attempts in case you ever need them.

Overall, payday loans are not the hardest bill collector to deal with, and as long as you maintain some form of communication with you, they generally just want to get their money back. One repercussion is that it is possible to burn your bridge with them if you show that you’re hard to collect from, but there are so many payday lenders that you can simply go to the next one.

Disclaimer: The information provided here does not in any way condone the nonpayment of a payday loan. It is provided for informational purposes only and is based on the experience of a former payday loan company employee. You should do your own due diligence to find out what the collection practices are for the payday lender you have chosen to go with.

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