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No, you will not go to jail for not paying back a payday loan – this is not something that will happen. The lender will take measures that are in line with regulation to recover their loan, such as follow up calls, emails, letters and using third party collection agencies. In very extreme cases, you may be taken to court, but not if it is over a very small amount.

If you are struggling to pay back your payday loan and are worried about being taken to court, this article aims to explain what will happen.


What Happens If You Do Not Pay Back a Payday Loan?


  • Incur late fees
  • Have a negative impact to your credit score
  • Find it hard to get other types of loans in the near future
  • Receive follow up calls, email and letters from the lender
  • Be subject to third party collection practices


Is It A Crime To Not Pay Back My Payday Loan?


It’s important to understand that payday loan non-payment is a civil, not a criminal, matter. The lender has the legal right to pursue collection actions to recover the outstanding debt. 

While the consequences of non-payment can be severe, including damage to your credit score and the risk of falling into further financial difficulty, going to jail is not one of them.


How Will My Lender Contact Me If I Cannot Repay My Payday Loan?


If you have had to borrow money and then default on a loan, your lender may employ various debt collection practices to recover the owed amount. These practices may include:

  • contacting the borrower by phone, mail, or email to negotiate repayment terms
  • seek a settlement
  • some lenders may enlist the services of a third-party collection agency

It’s crucial to engage with your lender and communicate any financial difficulties you may be facing to explore possible alternatives.

can i go to jail if I cannot meet my payday loan repayments


Can I Be Taken To Court For Not Paying My Payday Loan?


In rare cases, a lender may choose to take legal action against a borrower for non-payment, if all other measures such as phone calls, emails and letters have not been successful in recovering funds. See also – can a payday lender take me to court.

If a lawsuit is filed, it is important to respond promptly and appear in court. Ignoring a lawsuit can result in a default judgment being issued against you. 

If you are unable to afford an attorney, consult with legal aid organizations or seek guidance from a local consumer protection agency to understand your rights and options.

Depending on your specific circumstances, you may have defences available if legal action is taken against you for non-payment. These defences can include:

  • proving that the debt is past its statute of limitations, 
  • that the lender engaged in unlawful practices
  • the loan was unenforceable due to predatory lending practices

Seeking legal advice can help you understand the viability of these defences in your situation.


Do I Have Another Option If I Cannot Repay My Payday Loan?


In situations where multiple debts are overwhelming and repayment becomes impossible, filing for bankruptcy may be an option to consider. Bankruptcy is a legal process that allows individuals to seek relief from overwhelming debt. 

However, it is important to note that not all debts are dischargeable through bankruptcy, and the decision to file for bankruptcy should be carefully considered after consulting with a bankruptcy attorney.


What Should I Do If I Am Going To Miss My Payday Loan Repayments?


If you become aware that you are going to fall behind on your payday loan repayments, it is essential for you to contact your lender immediately. They may be able to help come up with an alternative repayment plan, and save you from falling into further financial difficulty. 

Options may include:

  • Pay plan or longer term arrangement
  • Freezing interest
  • Help from a loved one to pay off your loan (not recommended)
  • Extending your loan (not recommended, this becomes costly)

You should avoid using other loans to pay off your existing loan and extending, because this is where the interest can really add up. In addition to speaking to your lender, speak to a financial professional or debt charity for impartial advice.

Although defaulting on an online payday loan can have serious financial consequences, but it does not lead to imprisonment. Payday loan non-payment is a civil matter, and lenders typically resort to debt collection practices or legal action to recover their funds. 

Understanding your rights and obligations as a borrower is crucial, and open communication with your lender is recommended to explore repayment alternatives. 

If faced with legal proceedings, seeking legal advice and responding promptly is essential. Remember, it’s important to proactively manage your finances to avoid falling into situations where payday loan repayment becomes challenging.