When you have defaulted on an online payday loan, there will be collectors contacting you for payment. When the default is against a student loan, the government will be coming for your money. The Department of Education has many more options to collect against those who default with their student loan payments.
Collectors delight in having the opportunity to collect student loan debt. The use of these loans has exploded with the cost of higher education no longer being affordable for the average student. The struggle to payoff these loans continue to grow as well. Just the numbers have increased for those taking out these loans, so has the numbers of people who have fallen at least 12 months behind on their payments. There are now almost 6 million people in the U.S. who have fallen behind on their student loan payments. This number is a third higher than just five years ago. There is about one in every six borrowers who carry default balances which is interpreted to approximately $76 billion. The numbers are staggering and the problem continues to increase. The debt collectors are just one option to obtain repayment of these loans. The Department of Education pays collections agencies as well as other groups to hunt down those who are behind on their loans.
Your wages can be garnished by the government in order to collect on your loan. Another option which the Department of Education will have is to seize tax returns. You can file your tax return and only receive back a notice letting you know that your money was used to pay back part of your default loan. There have been people who change their phone numbers without prevail. The government has more access to personal information to find you in order to collect.
Payday loans will sell your debt to a collections agency.
These agencies buy the debt and then work at collecting money from those who have defaulted on the loans. The collections agencies which the Department of Education hires get a certain amount per dollar collected. Because the loans are usually in the tens of thousands, collectors are very happy to have the job. They will work hard to collect and must follow the best collections practices. Some of these agencies get over zealous with the income potential and have been prosecuted for aggressive and abusive collection attempts. No matter what the debt you owe, whoever comes collecting must follow the Fair Debt and Collections Practices Act.
Other large opportunities for debt collectors are with medical and credit card bills. Payday loan online agencies, will usually attempt to collect themselves before selling your debt off. Once the debt is sold, your credit will be negatively affected. Since there is no effect on your credit score throughout the whole loan process, it would be a shame to have the debt sold in the end. The better you protect your credit score, the more protected your future finances will be.
Spotya! Online Payday Loans uses its own in-house collections to help customers protect their credit. Responsible lending practices are a driving force behind the company’s practices.
