Payday Loan debt protections – At the beginning of 2019, a little over a year ago, a new director was appointed to the Consumer Financial Protection Bureau, a government-funded organization set in place to provide Payday loan debt protection. When the Bureau was put in place, it was meant to protect the rights of both the consumer and the business. It was meant to protect the consumer from lending practices that prey on vulnerable situations we all get into, but with new laws and regulations, the necessary protection the consumer needs are being threatened in our country’s complicated financial system.
Protective Rules that were set in place to limit how often a debt collector can text and call the consumer have been removed. Debt collector harassment will become easier for lenders to implement and more difficult for borrowers to avoid. What’s more, New laws regarding payday loan protections have been set in place in favor of shady lending practices.
Investigations by the CFPB will be reduced, allowing predators to take advantage of the lack of consumer protection that the CFPB is responsible for. New laws will make it easier for Payday lenders, who are notorious for high-interest rates and unfair lending practices, to find loopholes in the way they do business.
The new regulations will make it easy for Financial Predators to prey on hard-working consumers who might be having a difficult week or month. Payday loans are touted as an easy, quick solution to financial obligations, but become increasingly difficult to get rid of. With the high-interest rates and the new laws in place, payday loans are now even more of a financial trap than ever before.
Payday loans are touted as being the easy and quick, short term solution to a financial crisis. Most people who borrow from payday lenders are in debt for half the year, with many not being able to pay off the loans due to the much higher interest rates and surcharges that keep the debt rolling over from month to month. The idea is that the loan is a short-lived credit and that it be paid off with the next payday. It is supposed that the borrower will have taken care of the financial crisis with the loan. The thought is that the consumer will be back on their feet and able to pay off the debt. Although this is the way the loan is marketed, the average interest rates can be as high as 400%. That loan that was meant to be short-lived will suddenly become very difficult for the consumer to pay off. The loan was meant to be paid off in a few weeks, but a few weeks can easily become a few months and in some cases those months become years. This debt keeps growing into something substantial, in the end suffocating the consumer that thought the Payday loan was the answer to a temporary problem.
With the growing lack of protection towards consumers and the High-Interest rates that Payday loans are allowed to charge, it is best to steer clear of this kind of debt.
If you are a consumer who has succumbed to the “easy” solution that Payday Lenders market themselves as and you have found yourself in the midst of debt from Payday loans, how do you dig your way out?
There are a few options to get back on your feet. Help with Payday loan debt is available and you can get back into a state of financial wellness.
Payday loan debt settlement
This is an amazing option that will allow you eliminate a majority of the balance on your loan. This option allows the borrower to use a professional negotiator to work with the lender to devise a plan with the lender to pay off a portion of the debt. This portion tends to be significantly lower than what the debt has become and will allow the borrower some relief and avoid further legalities, like being sued by the lender for nonpayment or having wages garnished.
To take advantage of the option for Payday loan debt Settlement you will need to know the total amount of the loan, including accumulated interest, penalties, and late fees. Make sure you understand the laws in your particular state and how you can use them to your advantage to dig your way out of the payday loan hole. Sometimes the lender may not even be licensed to do business in your state. If this is the case, interest rates, and late fees penalties will not be legally required for you to pay.
In addition to the laws that shirk payday loan protection and are in favor of the predatory lender, there are a few laws that will keep the borrower from getting into an abyss. Lenders are required to verify the borrower’s income to ensure they have the ability to repay the loan. Lenders can not legally lend to consumers who have more than three payday loans in place.
Sometimes, if you can’t make a payment on your loan, you can contact the lender to work out an arrangement. They are often willing to work with the borrower after all a payday lender is running a customer-centric business and it is in their best interest to keep their client pleased. Word of mouth is essential for any business to flourish and prosper. If a lender can instill a practice of empathy in their customer service, it will go a long way, despite their predatory interest rates and lending policies.
The CFPB was set in place to enable Payday loan debt protection and although regulations are becoming less stringent, laws are still in place.
If you have acquired a number of payday loans, and you are drowning in the associated cumulative interest, there are still more options. If a Payday loan settlement is not an option for you, but you still need help with Payday loan debt, consolidation might be. Consolidate Payday loan debt and you might find your debt easier to manage because you will only be obligated to make one monthly payment. This payment is often a lot less than the cumulative payments you were making on your numerous high-interest payday loans.
Deciding to Consolidate Payday loan debt can result in a lower interest rate allowing you to get out of debt faster and easier. The support you receive by consolidating multiple loans can lead to less financial stress and some breathing room in your bank account. Payday lenders will no longer have access to draw from your bank account on payday. This is one of the biggest benefits of consolidation because it allows you to take back control of your paycheck. The lower fees and flexible terms allow for predictability and improved ability to pay. Most importantly the difficult, vicious cycle can be broken allowing for you to breathe easier and find some footing in your controlling your financial future.
Whether it be settling your Payday loan debt or consolidating your Payday loan debt, getting out from under the foot of predatory lenders will empower you to make healthier financial decisions in the future. There are benefits associated in both, so research and evaluation are crucial when deciding to move forward and get beyond the tumultuous cycle of debt associated with payday loans.