 TITLE: What Happens if I Default on a Payday Loan? CONTENT: Failing to pay back a payday loan comes with a number of serious consequences, including:\n*   **Additional fees and interest**: Depending on where you live and which lender you choose, you may face extra fees if you're unable to repay your payday loan. These fees are referred to as nonsufficient funds (NSF) fees and are charged when you lack the funds to cover a transaction.\n*   **Debt collection activity**: Your lender will attempt to collect payment for you for about 60 days. If you're unable to pay them within this time frame, they'll likely turn to a third-party debt collection agency. You can expect the debt collection agency to call you and send you letters on a regular basis until they receive the money. You'll find that their collection efforts are far more aggressive than those of your lender.\n*   **Damaged credit score**: If you repay your payday loan on time, your credit score shouldn't be affected. On the other hand, if you default on your loan and your debt is placed in the hands of a collection agency, you will see a dip in your score.\n*   **Court summons**: Even if you defaulted on a small amount of money, there is a chance that a collection agency will take you to court. Depending on where you live, this may lead to liens against your property and even wage garnishment.\n*   **Difficulty securing future financing**: Since a payday loan default can stay on your credit report for up to seven years, you may have a tough time getting approved for other loans down the road.\n*   **Arrest threats**: Although it's illegal for a lender to threaten you with arrest or jail, they may do so anyway. If you receive this type of threat, be sure to consult your state attorney general's office right away. END