If you’re strapped for cash, one of the easiest ways to raise money is with a payday loan. These are short-term loans usually repayable within two to four weeks. Repayment is made directly from your next paycheck.
Payday loans are extremely popular with borrowers. Just walk into one of the thousands of payday loan stores spread across the country, provide a few basic details, and you could immediately receive a loan of a few hundred dollars.
But are these loans really a good option when you need money?
That’s the question we’ll answer in this post. We’ll tell you about “The Good,” “The Bad,” and “The Ugly” aspects of these loans. After we’ve provided these details, the post will go on to talk about payday loan help.
This section will tell you what to do if you’re finding it difficult to pay off your payday loans. And finally, there is a section on payday loan consolidation, which describes the easiest way of escaping from payday loan debt.
Payday Loans–The Good
It’s quick and easy to take out a payday loan. All you need to do is visit a payday loan store or apply online. In a few minutes, the cash you need could be in your pocket or credited directly to your bank account.
Unfortunately, the only positive features of payday loans are the speed and ease with which you can raise money. Everything else about these loans falls into the “bad” or “ugly” category.
Payday Loans–The Bad
The biggest problem with these loans is their high interest rates. A recent report in Bloomberg points out that payday lenders charge interest rates that could be as much as 589 percent. However, many states cap lending rates for payday loan companies, and you could get a loan that costs significantly less.
Even if you manage to get a loan at a relatively low rate, you could still be in trouble. According to data from the Consumer Finance Protection Bureau, a United States government agency responsible for consumer protection, 80 percent of payday loans are rolled over within 14 days.
So, if you are like the majority of borrowers, the amount you owe the lender will keep increasing, and you could end up owing hundreds of dollars in fees for a small loan.
Payday Loans–The Ugly
High interest costs and an ever-increasing debt burden aren’t the only problems payday loan borrowers have to contend with.
When repayment is due, the lender could withdraw money directly from your bank account. And if your bank balance is not enough, they could try taking out the funds in smaller amounts in an attempt to get as much money as possible out of the account.
What if you don’t have money and can’t pay?
Payday lenders will do their best to get their money back. You’ll start receiving collection calls and letters from lawyers. The lenders could even get in touch with the relatives and friends you provided as references when you took the loan.
The worst-case scenario is that you could even go to jail. Although you cannot be arrested for defaulting on a payday loan, the Consumer Financial Protection Bureau has clarified that:
“However, if you are sued or a court judgment has been entered against you and you ignore a court order to appear, a judge may issue a warrant for your arrest.”
So, if you receive a court order, you should ensure that you contact a lawyer and follow the advice you receive.
There’s another ugly side to payday loans and payday loan companies. During the recent COVID-19 crisis, the government launched a $2.2 trillion relief package to help American companies and workers. Under this program, workers who had lost their jobs started receiving unemployment insurance checks for enhanced sums.
But in many instances, payday loan companies took away much of this money to pay off the debts owed to them. Consequently, thousands of individuals across the country didn’t benefit from a well-intentioned government program.
In the following two sections, we describe the way to avoid falling into a similar trap.
Payday loan help
It can be very stressful to find yourself in a situation where you don’t have the funds to repay your payday loan. Thankfully, there are several things you can do. At Real PDL Help, we specialize in helping borrowers settle their payday loans quickly and at the least possible cost.
The payday loan help that we provide includes the following services:
- We’ll help stop all the fees and interest charges that you are required to pay.
- We’ll get the lenders to stop the debits to your checking account.
- Real PDL Help will send “cease and desist” letters to all your lenders. This should get them to stop calling you for repayments.
- After implementing the new repayment program, the amount you need to pay every month will be much less than earlier. In most instances, it’s 10 to 30 percent of the original amount.
All you need to do is to fill our online application form. A Real PDL Help team member will get in touch with you immediately and guide you on the next steps to be taken.
Payday Loan Consolidation
Payday loan consolidation offers an excellent escape option to people who are caught in a debt trap.
What exactly is payday loan consolidation, and how does it work?
Here’s a quick explanation:
The first step is to find a payday loan consolidation company you can trust. Next, you’ll need to inform a loan specialist from the payday loan consolidation company about the details of all your payday loans. After you sign up for the program, your loans will be combined into one to simplify the repayment process. When this is done, you’ll need to make only one monthly payment instead of multiple payments to each of the lenders you have borrowed from.
Payday loan consolidation can offer tremendous benefits to people looking for a way out of the debt loan trap. These are some of the advantages that you can get:
Lower interest rate:
The payday loan consolidation company will speak to each of the lenders and negotiate a lower rate on your behalf. This can save you hundreds of dollars. Of course, your interest savings will vary with the total amount you owe.
Lenders will not be able to take money out of your bank account:
Now you control how much you pay your lenders. They will no longer be able to take money out of your checking account.
No more annoying phone calls:
The payday loan consolidation company will coordinate directly with your lenders. You won’t get any more calls from collection agents.
Freedom from court orders and threats of imprisonment:
You’ll be able to breathe easier knowing that you can’t be threatened with arrest or jail time.
A budget you can live with:
This is the foremost benefit of opting for payday loan consolidation. The monthly payment you’ll be required to make will be well within your budget. The lower interest rate and the extended repayment period will ensure that your repayments are made in affordable instalments. So, you’ll have enough funds for your day-to-day needs and essentials.
Payday loan consolidation can help you get away from the clutches of the payday lenders you’ve borrowed from. If you find that your debts are unmanageable, contact a payday loan consolidation company right away. It could be the best decision you’ve ever made.