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I can't repay my payday loan. What should I do?
If you can’t repay a payday loan on time, it is best to talk to the payday lender. Try to work out a new payment plan. But the lender isn’t allowed to give you a new loan until the first one is paid off.
If you’re not able to work out a new payment plan, the payday lender can:
- charge interest for the time after the loan was due, which can be up to 60% as an annual rate
- add other late fees and charges to your loan
- send your file to a collection agency, which will affect your credit score and make it harder to get loans in the future
- sue you in Small Claims Court
If there isn’t enough money in your account to cover your preauthorized debit or postdated cheque, the bank may also charge you a fee.
Rules about contacting you
Most payday loans are paid back in a single payment. If you miss the payment, your loan is in default. The payday lender may contact you by phone, or in person.
Payday lenders are only allowed to contact you Monday to Saturday from 7 am to 9 pm, and Sunday from 1 pm to 5 pm. They aren’t allowed to contact you on statutory holidays. They also aren’t allowed to contact you more than 3 times during any 7-day period.
Payday lenders aren’t allowed to threaten you or swear at you. They aren’t allowed to bully you into paying or harass you.
If the payday lender can’t get in touch with you, they may call your friends, family, and employer to find out how to reach you. But, they aren’t allowed to ask these people anything else or give them any information about your loan.