Payday Loan Debt
Payday Loan Debt: A payday loan is a short-term high-interest cash advance provided by the lender based on your income. The loan is credited to your next salary. Payday loans are also called cash advance loans or check advance loans. Due to high costs, payday loan debt may put you in a debt cycle.
For better or worse, payday loans are easy to obtain. But there are some serious issues that come from getting these loans. For example, borrowers can continually roll over their loans to delay or extend their payments.
As a result, the borrower is plunged further into debt, stuck in an endless loan cycle. To make matters worse, many people are confused about how payday loans truly work and are unsure about how to withdraw from payday loan debt.
How Do Payday Loans Work?How Do Payday Loans Work?
Some people choose payday loan debt without a clear understanding of what a payday loan actually is. It’s important to note that payday loans are different from your typical consumer loan and personal loan.
Depending on where you live, you can obtain a payday loan online or by visiting a physical payday loan branch. What’s more, the laws regarding payday loan debt vary from state to state. Such laws include the maximum amount you can borrow and the interest fees charged by payday loan lenders.
One reason why there is such a high demand for payday loans is the lack of other financing options for those who have no choice but to resort to these loans. They might not have any income, or their credit score might be too low to get a loan anywhere else.
Another driving factor is a fear of payday alternative loans and a lack of knowledge regarding how payday loans work. Many people who are in debt don’t know whether there are any viable alternatives. If there are, they are difficult to find. And some people simply feel too uncomfortable asking friends and family for financial help.
The Effects Of Payday Loan Debt
Think carefully before borrowing, and remember how much trouble payday loans can cause. The debt that results from payday loans is very high, and the accompanying interest rates are very expensive. It’s also as if they are designed to keep you re-borrowing over and over in an endless cycle.
To put it into better perspective, let’s explore four ways payday loans affect you whenever you miss a payment.
A Payday Loan Is A Financial Quicksand
Most borrowers are usually unable to repay their debts at the end of a typical two-week repayment period. This leads to debt rollover, where the borrower takes out another loan on top of the existing loan. While it sounds appealing at the time — you don’t have to hustle up a payment — it ultimately only serves to plunge you into deeper debt.
If you feel that you have no other recourse but to borrow money, it’s imperative that you borrow wisely. This means understanding your income and avoiding payday loans at all costs. Always weigh all of your options and explore other loan alternatives, such as borrowing via financial institutions or credit unions.
Lenders Want Access To Your Bank Account
It’s presented to you as a convenience; you give the lender your bank account information, and you don’t have to write a postdated check. The problem, though, is that if you don’t make a payment by your agreed due date, the lender will repeatedly attempt to pull money from your account.
This equals substantial overdraft charges that you are responsible for. What does that sound like? You guessed it; more debt. If you have already handed over your bank account information, just make certain that you pay on your repayment plan on time, every time. That’s the best way to avoid additional interest and fees.
Ruining Your Credit Score
No matter how quickly and easily you get your cash advance, it ultimately damages your credit. Even though the lender didn’t seem worried about things like credit scores, you can rest assured that the money you borrow will only cause you grief.
Since the vast majority of payday loan lenders don’t perform credit checks, their loans will neither show up in your credit report nor affect your credit score. As such, payday loans don’t help build your credit in any way.
However, if you fall behind on your monthly payments, you can rest assured that the lender will report your account to collection agencies. And that absolutely will affect your credit score.
Payday Lenders Can Be Stony Hearted Debt Collectors
Having money trouble and aren’t able to make your payments on time? Don’t expect any sympathy — or empathy — from the lender. Instead, you can look forward to endless calls at all hours, forever reminding you how imperative it is that you make a payment, as if you weren’t already aware that you’re behind.
And if you miss too many payments, your account will be turned over to collections, which, as discussed above, will reflect poorly on your credit report.
Ways To Exit Payday Loan Debt
Although payday loan debts are small loans compared to other types of credit, they can have a significant negative impact on your finances. As such, you will find it becoming increasingly difficult to pay the loan in full. This is because the borrowing costs add to your payment, making it hard to get ahead.
By the time you do make a payment, it’s almost time for your next monthly payment. As you can see, it’s easy to get stuck in an endless cycle of debt with payday loan companies. You end up spending a considerable sum of money to maintain your payday loan, leaving you in debt far longer than you had anticipated. This can make it nigh impossible to attain financial independence. Worse yet, payday loan debt has caused some people to file for bankruptcy.
To get rid of your payday loan debt, it’s imperative that you learn financial discipline and tighten up on your spending habits. Depending on your situation, you have to choose the payday loan relief plan that best suits your needs.
At National Payday Loan Relief, we specialize in helping our clients break free from payday loan debt and the endless cycle that it often brings with it. In order to eliminate your payday loan debt, you need to contact a trusted debt relief company that specializes in debt consolidation loans.
We can help re-negotiate better repayment terms so that you can comfortably make payments over repayment periods that have your best interests in mind. When you’re able to secure a debt settlement with your lender, it will effectively put a stop to the endless calls and “reminders.”
Let’s look at some other ways you can get out from under the debt of payday loans. By employing these tips, you may start to see light at the end of the tunnel and finally break free from your lender’s grasp.
Cut Any Excessive Costs
If you cannot generate any additional cash, you need to reduce your daily expenses to a minimum. This might mean cutting your cable, cooking your own meals instead of dining out, or bringing lunch to work instead of buying it.
The cash that you’ve saved on these expenses can then be used to pay off your payday loan debt. If you’re having a hard time coming up with extra cash, look around your home for things you don’t use anymore or could do without and sell them.
Consider getting a second job to earn more money. It doesn’t have to be permanent; just long enough to pay off your payday loan debt. As such, you might check around your area for temp jobs or seasonal positions. Any extra income will help you get out of debt that much sooner.
You could even restrict yourself from spending the money that you earn from your second job. Instead, put it aside with its only purpose being to pay off your payday loan debt.
Pay Extra On The Payday Loan Debt
If you want to expedite breaking free from the payday loan debt cycle, consider paying additional fees when it comes time to make your monthly payment. In doing so, the cost of repaying the loan will not only be lower, but it will take less time to pay what you owe.
The additional payment will be used to reduce your principal, thereby reducing your overall balance. At the same time, you must commit to stop borrowing money. You can effectively do this by making radical changes to your spending habits.
Track & Quantify All Your Expenses
In order to resolve your endless payday loan debt cycle, you need to list all of your expenses. When doing so, it’s important to pay careful attention to unnecessary expenses, as discussed above. Find what kind of expenses you incur between paydays and look for ways to get rid of anything you don’t need.
That means doing away with everything but the absolute necessities. The money that you save each month can be put towards paying off your payday loan debt. You will likely be amazed at just how much money you can really save every month.
We understand that such changes will probably take some getting used to. But once the initial sting wears off, you will find yourself quickly paying down your loan debt and getting that much closer to financial freedom.
It’s also important to create a realistic budget that helps you keep track of your spending. The great thing about budgeting is that you can fine-tune it to best suit your financial needs.
Again, this is a challenging endeavor for many people. Oftentimes, the ability to make these kinds of life changes only comes with experience. As such, you may find it’s necessary to contact a knowledgeable debt relief firm, with skilled debt counselors who can guide you through the rough waters of debt management.
Like National Payday Loan Relief. We’ve been doing this for over two decades and can help you find true financial freedom from your payday loan debt. Our counselors can show you precisely how payday loans work so that you know to avoid them in the future.
We also work closely with you to find a payment plan that works for you, with terms that you can realistically manage each month. We invite you to contact us with any debt concerns. First, though, let’s look at some other ways that you can get out of your payday loan debt cycle.
Identifying The Problem Causing The Payday Cycle
Loans aren’t always a bad thing. When you use borrowed money responsibly, you can meet your other financial duties and get caught up on essential bills. It’s when you repeatedly borrow money that it’s clear there is an issue with your finances and spending.
As such, it is vital that you find out what exactly is causing you to consistently remain in debt. Are you spending too much on dining out? Do you have unnecessary entertainment costs each month that you could live without?
It’s important that you examine your current expenses and make cuts wherever possible — at least until you can get to where you are financially responsible with your spending. It might sting a bit at first, but you’d be surprised what you can live without once it’s gone.
Do you really need monthly subscriptions to Netflix, Hulu, Disney+, Amazon Prime, and other streaming services? If it means getting out of payday loan debt, those are the kinds of cuts you must be willing to make.
Moreover, do you rely on credit card spending for many of your expenses? If so, it’s important to keep in mind that you’re also paying the annual percentage rates (APR) on any credit cards you currently have. All of these fees add up, even though they might seem insignificant on their own.
But together, they are additional fees that you don’t need right now, especially while you’re in debt. If you are unable to resolve these things on your own, consider speaking with a qualified credit counselor who can guide and direct you on making the appropriate changes needed to help you get out of debt.
Financial Credit Counseling
You may need to consult a credit counseling agency, and there is certainly no shame in doing so. The only shame is allowing your debt to continue to negatively affect your life. Our knowledgeable agents here at National Payday Loan Relief will help you learn how to better manage your finances and so much more.
Not only that, but they will advise you on how to best get rid of your payday loan debt once and for all. Consulting agencies like us can assist you in getting the best return on your debt, negotiate solutions or reaching a settlement, or help you adjust your budget based on your current financial situation.
Our goal is to provide you with the most effective and beneficial tools and resources to finally break free from your payday loan debt.
Debt Management Plan
When you get on a debt management plan, you consult with a trusted credit counselor who helps you develop a budget and debt repayment plan. The consultant can negotiate with payday lenders on your behalf to accept less than the amount you owe them.
After assessing your financial situation, the consultant will advise you on the best way to get out of your payday loan debt cycle. When National Payday Loan Relief was founded, our primary goal was to help people break free from the chains of debt.
Over 20 years later, our mission remains the same. Our goal continues to be to help people get out of debt and enjoy true financial freedom. As such, we encourage you to contact our debt experts when you’re ready to put an end to your payday loan debt trap.
Extended Payment Plan (EPP)
Many states require payday lenders to provide extended payment schedule procedures that allow you to repay the loan over a longer period of time. The extension can be paid up to four times a week. Most deferred payment plans will remind you to pay late fees.
If your paycheck is a day late, you don’t have to worry. This is an option you can consider to reduce stress and reduce the financial burden of your salary. Most people prefer to extend the repayment period as one of the ways to withdraw from payday loans.
Payday Alternative Loans (PAL)
Payday replacement loans are designed to address the same needs as payday loans. However, their cost and repayment period are reasonable. This arrangement allows you to pay in monthly installments with a maximum period of six months.
You can use alternative payday loans to repay your payday loans. Another type of loan is the payday loan relief program, which provides lower interest rates, thereby reducing your debt.
File a Complaint
If the lender refuses to cooperate with you on the payment plan, you have the option of filing a formal complaint with the payday loan company to the state regulatory agency or to the Consumer Financial Protection Bureau at the national level.
When your payday loan debt spirals out of control, you may consider bankruptcy as a means to debt relief. But filing for bankruptcy should always be a last resort. Bankruptcy is accompanied by unfavorable factors, such as rejection of future credit, mortgage loans, and increased insurance costs for up to 10 years.
Therefore, we encourage you to consult our debt experts at National Payday Loan Relief. If you find yourself in an endless payday loan debt cycle, we can help you obtain the relief you seek.
Settle Your Payday Loan Debt
Do you have multiple payday loan debts? This is a clear indication that you need help. A suitable payday loan debt consolidation plan is needed to resolve your payday loan debt. If you are already in debt and cannot repay your loan, borrowing more money will only make matters worse.
National Payday Loan Relief has more than ten years of experience in debt settlement plans. We can provide quality services to help you pay off your debts in a timely manner. If you need any help with payday loan debt relief, please contact us immediately to see what National Payday Loan Relief can do for you.
How Do You Repay A Payday Loan?
By your next payday, you should make a single payment of the loan debt. Because of the varying repayment terms by different lenders, always ask for the specific date of repayment or confirm from the agreement.
When the loan is due, and you haven’t made a repayment, money can be electronically be withdrawn from your account by the lender since they can do legally when you sign the payday loan documents.
Unfortunately, by the due date, most borrowers are usually unable to repay the loan. It makes the loan to be rolled over, worsening the effects of payday loan debt. In some cases, the borrowers seeking another payday loan debt in less than 30 days.
Different Options Paying Your Debt:
◊ A Check On Your Next Pay Day
◊ A Postdated Check When Applying
◊ Your Bank Account’s Direct Debit
◊ The Online Website Of The Lender
◊ Any Other Forms Of Credit
Alternatives To Help Settle Your Payday Loan Debt
National Payday Loan Relief provides to help get out of your payday loan debt. They have less strict approval requirements and charge way lower fees and interest rates than payday lenders. Besides, they give you longer repayment periods giving you ample time to look for the whole amount. Since it offers longer repayment periods and lower interests, the bad credit consolidation loan can have a monthly payment that helps you in managing your debt repayment. Moreover, the debt shows on your credit report, which helps you build a good credit score given that you make timely loan repayments.
Not all states permit payday lending. However, those that do require a licensed payday lender. If the lender is unlicensed, a loan is most likely to be considered null and void. Here, the lender has no authority to ask for loan repayment or collection of cash.
Payday Loan Relief Program
Payday loan relief programs endeavor to Consolidate Your Payday Loans over time into a single escrow account. Once the balance on the escrow account gets to a designated amount, the online company rolls out negotiations with your creditors. On the assumption that it becomes a success, your creditors concede with National Payday Loan Relief to waive the obligation as a trade-in for partial payment.
In this payday loan relief program, you can borrow money at a low interest rate and use the same to settle your payday loan in full and any other high-interest debt that you may have incurred. You will still be in debt but will have less stress, and the monthly payment will be less. National Payday Loan Relief collaborates with financial experts and top lawyers to offer loan consolidation services to help you get out of payday loan debt.
You will have more time to pay and will be less stressed. The ways to exit payday loans discussed above need financial re-adjustment and sacrifice. There is no single correct approach to getting off payday loan debt. It would help if you considered your unique position to craft the approach that best suits your situation.
A holistic SWOT analysis of your financial situation is necessary. An extended repayment plan may be sensible if your state has legislation that requires lenders to permit them or if the lenders are willing to cooperate with you. The option of obtaining another loan at a lower interest rate in order to offset a payday loan debt is applicable if you qualify for the loan or have a relative ready to lend you some cash.
Payday Loan Alternatives
To be on the safe side, you shouldn’t resort to payday loan debt; The effects of a payday loan are ridiculous. So here are some money alternatives to help you avoid the payday loan debt trap:
Bad Credit Personal Loans
Your bad credit can still get you a loan. Some personal lenders work with people with bad credit ratings. Whether you have an emergency or are in a fix, you can always get that cash. Although the interest rates will be higher than other personal loans, they are far better than the payday loan interests.
Bad Credit Cards
Some credit card institutions give unsecured credit cards with minimal credit requirements. People with bad credit can use retail cards, for example. Many of them can be used outside the store despite coming with low credit limits. Some banks will even accept you to borrow with a low credit rating.
Family & Friends
Asking for financial assistance from loved ones is never a fun tete-a-tete. Nonetheless, if it prevents you from driving deeper into debt, then it’s worth it. Be sure to stick to your agreement to avoid vandalizing your relationship.
Time To Get Out Of Payday Loan Debt
A payday loan solves an urgent need for money, especially in emergencies. However, since a payday loan debt has very interest amounts, you could end up in an atrocious debt cycle. A payday loan provides you with short-term cash; however, it is not the only available option.
If you sincerely need cash, consider better options that wouldn’t make your life even more difficult. Before approaching a payday lender, exhaust all the options you can think about before making the decision. You would love to have some financial power and not an alternation of unending debts.
Get A Free Quote
At National Payday Loan Relief, we pride ourselves in providing the best payday loan debt elimination option for consumers struggling with debt and looking for a partner to help them achieve financial freedom. Some of the reasons to choose us are:
- We have been in the debt settlement business for over 5 years.
- Our Customer Service Department is always available to our clients.
- Our company was founded by veterans of the debt settlement industry and out attorneys have negotiated millions in debt over the last 12 years.
- Our hundreds of satisfied clients speak for our effectiveness.
- Experienced negotiators negotiate your debt.
- We are serious about getting results.
If you have multiple outstanding payday loans, you owe it to yourself to schedule a free, no-hassle consultation with one of our Debt Consultants today at 1.888.407.4521 or fill out the form below.