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It depends on the terms of your loan agreement, and the type of loan you're dealing with.

Generally, there aren't any criminal penalties - failure to pay a loan is a civil matter between you and the lender. That isn't to say, however, that the consequences can't be severe.

First, many loan agreements have "acceleration clauses" meaning that if you miss a specified number of payments, the entire balance becomes due and payable immediately. If you can't or won't pay the entire balance, your creditor can sue you for failure to pay.

The creditor will probably win, resulting in a judgment against you. This judgment could be enforced in a number of ways. The most common would be wage garnishment - basically, the creditor would be able to take a percentage of your wages until the entire debt is paid off.

If the debt is secured (a mortgage or car loan, for example), they can repossess the collateral (your house or car). If it's unsecured, they'll have to sue you and hope for the best.

Furthermore, failure to repay a loan can destroy your credit rating, making it difficult or impossible to get loans in the future.

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โˆ™ 2009-08-13 18:26:29
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Q: What is the penalty of not repaying a loan?
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What Consequences for not repaying a loan?

Negative impact to your credit score, and your car could get repossessed.


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If you have problems repaying your loan you should contact?

A. The Direct Loan Servicing Center .


Can you be sued for not repaying a pay day loan in Texas?

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What is the procedure for bank undertake a property for non repay loan in India?

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If a creditor is taking your car to be sold as payment and you still owe money on the car what happens once it is sold at auction does part of the money go towards repaying the loan on the car?

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What is the penalty if I am a month late repaying express pay day loans?

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What does a prepayment penalty that is Not Applicable mean?

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Payday loans are illegal in West Virginia.


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