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I Can’t Pay Back My Payday Loans

What to do if you can’t pay back your loan. There are options!

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What Shall I Do?

If you can’t pay back your payday loans by the due date, you need to make sure that you keep the lender informed. A few common scenarios regarding this question are discussed below to give you an idea.

I don’t have a sufficient bank balance to repay my payday loan. What shall I do?

If you have authorized your payday lender to carry out an automatic withdrawal on the due date, you need to inform them well in advance not to carry it out. It will keep the transaction from getting dishonoured – meaning that you avoid dishonoured debit fines. You can also do this by cancelling the automatic withdrawal authority by contacting your bank.

Next, you need to work out a schedule with your payday lender. Some payday lenders are open to rescheduling payments as long as you can convince them. If that doesn’t work out, make sure you arrange the funds as quickly as possibly to avoid the piling up of late fees and interest.

What action can a lender take regarding unpaid payday loans?

According to Australian Debt Recovery Laws, payday lenders cannot resort to any unlawful means to recover payday loans.

Here’s what a payday lender will do in case of non-repayment:

  1. Try to contact you and work out a plan if possible
  2. Try to help you find the best way to freeze the interest accumulation
  3. All else fails, resort to legal help that includes lawful arbitrations

Can I get another payday loan to help me pay back my previous payday loan?

As per the ASIC rules and norms, you cannot get another payday loan while the previous one is still not paid back.

What should I do if I find myself tangled in a payday loan that I can’t pay back?

If you find yourself in an unfortunate situation where you have a payday loan that you can’t pay back, you need to contact the Australian Securities and Investments Commission to get free financial advice and possible legal help.

You can contact debt charities that work in Australia. A prominent example is Christians against Poverty.

You can also take up free financial literacy courses offered by the Australian Bankers’ Association, to understand how to manage funds and how to tackle loans.

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