I can’t repay my payday loan. What should I do?

1. Learn more about what the lender can do

If you can't repay your on time, the lender can do one or more of the following:

  1. Add late fees and other charges to your loan. They can also charge for the time after your payment was due. This can be up to 2.5% per month. These additional charges can make it very hard to pay back the loan, and can cause you a lot of trouble in the future.
  2. Report you as delinquent or send your file to a , which means that the collection agency will try to get repayment from you. Both of these will affect your and make it harder for you to get loans in the future.
  3. Take you to Small Claims Court. If the lender wins in court, the court might allow them to take some of your money or property. The court may also allow the lender to take money directly from your paycheque. This is called garnishing your wages.

If you can't repay your loan and the lender won't agree to a new payment plan, you can try to speak to a non-profit credit counsellor. They might be able to help you.

If you gave the payday lender a cheque that bounced, or if you did not have enough money in your account when they tried to withdraw the money, the lender can charge you a $25 fee. They can only do this once per loan, no matter how many times your cheques bounce.

Options that are not allowed

A payday lender can't take money directly from your wages or ask your employer to repay the loan. This means the lender can't ask you to sign a “” or other document that would let them take your pay.

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