Katapult is a rent-to-own company offering financing for furniture, electronics, and other big-ticket items. While it can provide a convenient way to acquire goods, understanding the consequences of non-payment is crucial. Failing to meet your payment obligations with Katapult can lead to a range of serious repercussions, impacting your credit score and potentially your access to future financing.
What are the consequences of missing a Katapult payment?
Missing a single payment with Katapult can trigger a chain of events designed to encourage payment. These typically include:
- Late Fees: You'll be charged late fees, which can significantly increase your overall cost. The exact amount varies depending on your agreement.
- Repeated Late Payment Notices: Expect numerous phone calls, emails, and possibly even letters reminding you of the overdue payment.
- Account Suspension: Katapult may suspend your account, preventing you from making any further purchases through their program.
- Account Referral to Collections: If you continue to miss payments, Katapult may refer your account to a collections agency. This will severely damage your credit score and can lead to additional fees and legal action.
Will missing a Katapult payment affect my credit score?
Yes. Failing to make payments as agreed upon with Katapult will negatively impact your credit score. This is reported to major credit bureaus, making it harder to obtain loans, credit cards, or even rent an apartment in the future. The severity of the impact depends on the length and frequency of missed payments.
What happens if you don't pay Katapult after it's been sent to collections?
Once your account is sent to collections, the situation becomes significantly more serious. Collections agencies are aggressive in their pursuit of payment. You may face:
- Further Fees: Collections agencies add their own fees on top of the original debt, significantly increasing the amount you owe.
- Legal Action: In some cases, collections agencies may pursue legal action to recover the debt, which can result in wage garnishment or even a lawsuit.
- Damage to Your Credit Report: A collections account will remain on your credit report for seven years, severely impacting your ability to get credit in the future.
Can I negotiate a payment plan with Katapult?
Yes, it's often possible to negotiate a payment plan with Katapult, before your account goes to collections. Reaching out proactively to explain your financial situation and propose a solution is crucial. They may be willing to work with you to create a payment plan that fits your budget. However, this is more likely to succeed if you contact them before you miss multiple payments.
How can I avoid missing Katapult payments?
The best way to avoid the negative consequences of non-payment is to ensure you can afford the monthly payments before signing up for Katapult's services. Consider the following:
- Budgeting: Carefully create a budget and ensure you can comfortably afford the monthly payments alongside your other expenses.
- Automatic Payments: Set up automatic payments to avoid missing payments due to oversight.
- Communication: Contact Katapult immediately if you anticipate difficulties making a payment. Proactive communication is key to finding a solution.
What if I can't afford my Katapult payments anymore?
If you find yourself unable to afford your Katapult payments, contact them immediately. Explain your situation honestly and explore options like a payment plan, hardship program (if available), or returning the merchandise. Acting quickly can minimize the damage to your credit score and prevent more severe consequences. Don't ignore the problem; proactive communication is your best strategy.
