by 
The Curious Bag
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Payday loans should only be taken in cases of emergency, because they entail a much higher interest rate and stiffer penalties for a failure to pay. There are a number of negative consequences associated with failing to repay a payday loan.
Credit Score
When you fail to repay your payday loan, the lender is within its right to report this to one of the three major credit bureaus, which will cause your credit score to decrease.
Fines
The fees associated with failing to repay a payday loan can be very harsh and are often larger than those associated with a normal loan from a bank.
Interest Accumulation
Failing to pay back your payday loan immediately will provide more time for interest to accumulate on the loan. This is can be a very big problem, since payday loans usually have very high interest rates.
Criminal Prosecution
While you cannot be prosecuted for most loan defaults, a payday advance essentially equates to a predated check. Many states have laws against writing checks that bounce.
Talk to your Lender
If you have trouble paying your payday advance on time it is always a good idea to let your lender know so that you can work out a deal for repayment. This may possibly reduce the number and degree of negative consequences.
Source:
Credit Loan: What Happens When They Can't Pay Their Payday Loans?
Pay Advance Lending: What Happens of You do Not repay a Payday Loan?
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