The unsecured personal payday loan is an anytime dependable financial help for the salaried British people facing temporary financial uncertainties and crisis. The salaried people rely highly on private loan stores to get cash help within a day without getting indulged informalities. As of today, the direct lending company has become the most preferred choice of salaried borrower rather than to approach regular banks or traditional financial institutions because the private loan stores are not bothered much about the borrower’s previous repayment record. Although wide array of short-term no guarantor loans are available but payday loan also known as payday advance, salary loan and cash advance loan is the most applied loan type despite the high APR even more than 1000.


Initial Stage of Failure in Repaying Payday Loan:

As soon as you experience the problem in repaying the payday loan, contact the lender because most of financial problems start indicating ahead of time and you should respect these. The most of genuine FCA registered lenders are ready to change the repayment terms and conditions, probably at higher interest rate but paying high is good rather than not paying it at all and to face severe consequences.

If you again fail to repay the balance amount and stop paying, direct lender wouldn’t waste time in waiting and will initiate withdrawal immediately from your saving account; the permission to do is often grated as the borrowing condition. If the due debit amount is not available in saving account, they break the required dues into small chunks to extract whatever is possible. Each failed attempt to withdraw the cash triggers default fee for you, while the successful withdrawal drains out the bank account leaving you to face other transactions’ bounce resulting in penalties. In parallel, lender sends informing and demanding letters through law agency. Lender may inform the referred relatives and friends also; it brings a bad name to you in the society. Better, don’t borrow if can’t repay on the time.

Related: 5 Things You Do Before Applying For A Payday Loan

Can You Go To Jail Also FCA Regulated Not Paying Payday Loan?

Failure to repay payday loan is not the criminal offense; even a lender can’t threat a borrower for making arrest or sending to jail. The lender can’t put you in jail. Only a prosecutor can file a case against you if he/she believes that you have committed the crime. However, all the prosecutors know that not paying the debt is not a criminal offence; therefore, no one easily prosecutes you. On the other side, most salary loan lenders know well that the prosecutors too don’t have time for payday lenders to justify the crazy APR and interest rate that seem impractical looking at first sight. The lender threatens for going to local court just to scare you for paying.  Payday lenders scare the borrower in all the possible ways but don’t let them make you scared. If you fail to repay a small debt taken at too high APR, it is not a crime; relax, you can’t go to jail. The lender too knows that you couldn’t repay the entire amount loan because of exceptionally high interest rate. In parallel, lender too is well aware of risk involved because you are accepting the debt at such a high cost.

Related: What to Do if You Can not Pay Your Payday Loan

Possibilities for Not Paying Payday Loan:

Each payday loan is referred to credit reference agencies like Equifax, Callcredit, Crediva and Experian; it doesn’t matter whether it is paid or not. If you fail to repay the debt, the balance is sold out to a debt collector agency. Unpaid debt referred to debt collecting agency is reported immediately to credit bureau reference agencies, and you get a long-term set back at credit score report. If you don’t pay even to debt collector, the agency may use against you.

Now the most expected development is- getting CCJ. You will have to repay the balance debt even after receiving CCJ. If you do not follow CCJ terms and pay accordingly, the debt collecting agency will request the court to issue orders for enforced repayment. The court can order for charging order, bailiff action, or attachment of earning. Bailiff order that comes with ‘warrant of execution’ allows the debt collecting agency to go to your premises to collect money; if failed, it can possess the goods to recover the dues. If you are a salaried, employer may also be asked to deduct a monthly installment. The property can also be possessed but as the payday loan amount is often very low, it is not done.

Related: Why Are Payday Loans Better Idea over Other Options?

Concluding Note:

You can’t be sent to jail for not paying the payday loan doesn’t mean that you should not repay the debt. I have taken any loan, it is your legal and social responsibility to repay it. Failing to repay the debt on time because of the genuine reason is one thing but neglecting the responsibility is another. The failure in repaying even a small loan amount harms you in multiple ways for over the years.