Missing a payday loan due date is stressful, but knowing exactly what default on a payday loan in Louisiana triggers — and what it can’t — helps you respond calmly.
Quick answer: If you default in Louisiana, the lender may charge 36% annual interest for up to a year (then 18%), add an NSF fee, and sue in civil court — but criminal prosecution is prohibited, and under Act 510 payday lenders can't report negative information to credit bureaus.
What the lender can do
- Post-default interest: up to 36% per year for months 1–12, then 18% after that.
- NSF charges: one NSF fee plus the greater of $25 or 5% of the check if your payment bounces.
- Civil collection: the debt can go to collections or civil court, where a judgment could lead to garnishment.
What the lender cannot do
Criminal action over an unpaid payday loan is prohibited — you can’t be jailed for the debt. Threats of arrest violate the law. And payday lenders themselves can’t report negative marks to the credit bureaus, though a collector who buys the debt might.
Your best moves
Request the written extended payment plan before default, answer collector contacts in writing, and get free help from a nonprofit credit counselor if the balance is unmanageable. Report abusive collection to the OFI and CFPB.
Frequently asked questions
No — criminal procedures over payday debt are prohibited.
The lender can’t report it, but a collection agency that buys the debt may; act before it’s sold.
Louisiana’s statute of limitations on written contracts is ten years.
Educational content, not financial advice. Always verify a lender is licensed by the Louisiana Office of Financial Institutions (OFI) before borrowing.