Life happens.

You took out a payday loan to cover an emergency — but now payday has come… and you can’t afford to pay it back.

What happens next?

Does your credit score tank? Will lenders send the police after you?

Let’s calm it down and break it down properly.

Here’s exactly what you can expect — and what you can do if you can’t repay your payday loan on time.

1. Additional Fees Start Adding Up

The very first thing you’ll face is extra fees.

If you miss your due date:

• Late fees may be added to your balance
• Some lenders also charge non-sufficient funds (NSF) fees if your account has insufficient funds for automatic withdrawal

💡 Tip:

Fees can grow fast, turning a small $300 loan into a $500+ debt quickly.

2. Your Loan Could Be Sent to Collections

If you ignore your lender, after some time (usually 30–90 days), they might:

• Sell your loan to a collections agency
• Assign a collector to start contacting you by phone, email, mail

⚠️ Important:

Collections can hurt your credit score badly —

even if the original payday loan didn’t affect your credit when you first borrowed it.

3. Your Credit Score May Take a Hit

Initially, payday lenders don’t report loans to credit bureaus.

BUT once the debt goes to collections:

• It appears as a negative mark on your credit report
• It can lower your credit score by 50–100 points or more
• It stays on your report for up to 7 years

4. You Might Face Bank Account Garnishment (in Some Cases)

Some lenders (depending on your state laws and loan contract) might:

• Attempt multiple withdrawals from your bank account
• Drain your account balance
• Leave you facing overdraft fees

If you signed an agreement giving them access, it’s legal.

If you didn’t, they would need a court judgment first before garnishing.

5. No, You Won’t Go to Jail

Good news:

You cannot be arrested just for owing a payday loan.

U.S. law (Fair Debt Collection Practices Act) protects consumers from debtor’s prison threats.

If a lender threatens jail time, report them — that’s illegal harassment.

What Should You Do If You Can’t Pay?

✅ Contact Your Lender Immediately

Explain your situation —

Many lenders offer extended payment plans or small repayment adjustments if you communicate early.

✅ Request an Extended Payment Plan (EPP)

In some states, payday lenders must offer an Extended Payment Plan if you ask before defaulting.

An EPP lets you:

• Break your payment into smaller chunks
• Avoid extra fees and collection activities

Check your state laws or ask your lender directly.

✅ Prioritize Your Payment

Even if you can’t pay the full amount, paying something can:

• Slow down collections
• Reduce late fees
• Show you’re making a good-faith effort

✅ Explore Debt Assistance Options

If you’re completely stuck:

• Talk to a nonprofit credit counselor
• Explore debt management programs
• Negotiate a settlement (pay part of the balance in exchange for clearing the debt)

Final Thoughts: Don’t Ignore It, Act Fast

A missed payday loan won’t ruin your life —

but ignoring it will make things much worse.

📌 Act early.

📌 Talk to your lender.

📌 Explore your options.

At FundMyWeek, we believe payday loans should be a helpful tool, not a trap.

And when challenges come up, knowing your rights and acting smart makes all the difference.

👉 Find Safe Emergency Loan Options Now

Frequently Asked Questions

Q: Can payday loan lenders sue me if I don’t pay?

A: Yes, they can file a lawsuit — but it’s rare. Most lenders prefer to work with collections agencies.

Q: Can a payday loan company garnish my wages?

A: Only if they win a court case against you first.

Q: Will my credit score drop if I default on a payday loan?

A: If your debt goes to collections, yes — your score can drop significantly.

Q: What’s the best way to avoid payday loan problems? A: Borrow only what you can repay, budget carefully, and communicate early if you hit trouble.