Yes, payday lenders can take money from your account, but you have the right to prevent them from doing so. When you apply for a payday loan, you give the lender permission to take money directly from your checking account. This is done through a payment authorization, also known as an “ACH Authorization”. If you decide you want to stop automatic debit payments from your account, there are a few steps you can take.
As a last resort, you can close your bank account to avoid automatic withdrawal. However, this does not mean that you do not have to repay the loan. It is important to note that stopping automatic withdrawals does not mean that you do not have to repay the loan. A loan that you are collecting will appear on your credit report and negatively affect your credit score for up to seven years.
The lender may even file a lawsuit against you in order to force you to pay. If you have a good credit score and regular income, you can get a loan from traditional banks, credit unions and other financial institutions. If you need to block the payment of a payday loan for some reason, such as an urgent expense, you can request it from the lender. Let them know that your payday lender is no longer allowed to accept automatic payments from your bank account and that you have revoked the ACH authorization that allows them to charge your account via electronic funds transfer. In certain situations, anyone may think that paying the full salary as payday payment may hurt next month's budget, and they may plan to close their bank account and default on a payday loan. If you close your account or remove your payday lender's access, they will waste little time trying to get your money back.
Yes, you can stop payday loan companies from debiting money from your account if needed. Finally, after following the steps above to prevent payday loans from debiting your account, keep a close eye on your bank account for unauthorized transactions. Payday lenders sometimes partner with Native American tribes, cross state lines, or operate overseas to bypass state laws.