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This question has kept many men and women from taking out an online payday loan in the first place. They are so worried that they will be arrested if they fail to repay their debt that they do not want to risk it.

One reason people believe that they can get arrested if they fail to repay their loans is due to bad-check laws. These laws were instigated to protect citizens from being paid by bad checks. Online payday loan companies usually do not interact with checks, because they are much more accustomed to electronic transfers, and the laws do not touch upon defaulting your loan. In fact, these laws do not have any correspondence with online payday loans, so the arrest threats are quite inapplicable.

Some payday lenders use heavy language to intimidate clients into paying back their loan right on time. Key words to look for in this category are "offenders," "criminals" "drastic action" or "illegal conduct."

Some companies threaten their customers by saying that they can locate their address and will target them for arrest, when in actuality they have little legal power to do so. In many states, collectors' are permitted to call their client's and request the repayments, but this is often the limit and stalking is prohibited in many states.

It is extremely rare for a client to be arrested for refusing to pay back a payday loan. These cases often get into to bigger pictures than simply a short term loan repayment.

The penalties that you can receive for refusing to pay your loan back are not as drastic, but can still be embarrassing and time consuming. Many customers who refuse to repay their loans are sued in small claim's courts, which can be an expensive and time-consuming ordeal.

In conclusion, the best advice is to simply pay back your payday loan on time. This will keep you from getting caught in debt, or having to deal with legal action. Also, reliable customers can expect to see their credit rise and will be treated with more respect. This will guarantee a simple loan experience and will keep you out of complicated roll-over fees. Payday loans can be very beneficial, if you have a plan to pay back the loan when it is due.