US Man Paid $50,000 Interest For A $2500 Loan: Avoiding Payday Loans
Avoiding Payday Loans – When you are getting a payday loan, you might feel like this is the fastest way to manage your debt issues. However, National Payday Loan Relief thinks there should be a better way. A man from Missouri actually paid $50,000 in interest when he took out a $2500 loan, and that is why people need to learn what to do if they are stuck in the middle of a payday loan nightmare.
Took Out A Payday Loan?
When you take out a payday loan, you are given a very small amount of money for a very high-interest rate. The terms on these loans can be devastating because they allow the interest rates to jump exponentially over time. The interest rates are not based on current market trends, and you may be stuck with interest rates that seem impossible to refinance.
What Happened To Elliott Clark?
When Elliott Clark took out his first payday loan, he got $2500. He realized that he was stuck in a payday loan nightmare because the interest rates were almost too high to imagine. However, he got in this situation because he was hit by the banks with overdraft fees and other charges that he could not control. Elliott Clark is the victim of a predatory banking system that hurts people every day. If people can afford to stay with a bank, they will pay overdraft fees until they cannot afford it anymore. These customers, like Mr. Clark, will leave the banks because they cannot afford to pay the overdraft fees. When this is the case, most people will use payday loans to get by. This is a horrible thing that causes emotional problems for the people who are struggling with debt. Elliott told reporters:
“It was hard for me to talk about it without breaking down in tears. If you’re a man you take care of your family. If I had another choice, I would have taken it. I wouldn’t have gotten in that situation at that time.”
Many people find themselves in this situation because they needed quick cash from a payday loan company. At the very least, these people believed they could solve their short-term problems.
How Do People Deal With Overdraft Fees?
One of the best options for people who do not want to use payday loans is a new bank account. It can be difficult to get a new bank account without a good credit score, but some banks offer overdraft protection, alerts for low balances, and do not charge exorbitant fees. If you can contact the bank, you can get some of your fees reversed. This is not a cure-all for people who have debts problems, but you can stave off the banks while you determine your next move. In some cases, you might avoid using a payday loan because the bank did not force you to abandon your account.
Why Are Credit Scores Part Of The Problem?
Elliott Clark has a credit score of just over 600, but that was not enough for him to get a loan from a traditional bank. The problem with his credit score is that it forced him to use a payday loan company. He continued to make payments on what turned out to be a predatory loan, and he needed a payday loan debt relief company to help him. When you need help with payday loan debt, you need to find a way to fix your credit score over time. Yes, it is difficult to save money for the future, but you know that you should not get another payday loan.
How Do People Get In This Situation?
Elliott Clark’s wife slipped on ice in 2003, and she broke her ankle. She needed surgery to have her bone set properly, and that surgery cost the family over $25,000. At the same time, she could not work because she was a retail employee. Her company did not offer benefits, and the family continued to lose money while she recovered.
Elliott needed to take out five $500 loans from the storefront vendors that tend to prey on people like him. He was paying interest every other week, but that was all he was paying. These loans force you to pay the interest without ever paying the principal. If your principal balance never goes down, you will need a way to eliminate payday loan debt. It took Elliott five and a half years to pay off the debt while mostly paying the interest. He could have worked with a payday loan debt relief company like National Payday Loan Relief, but he did not realize these options were available. He changed jobs several times, and he ended up paying $50,000 in interest on just $2500 in loans.
What Can Be Done To Help People Like Elliott?
The Consumer Financial Protection Bureau has been fighting against predatory lenders for some time, and the CFPB is working on holding talks about what they call “small-dollar lending” practices. The CFPB knows that some lenders charge as much as 700% interest on their loans. The people that take out these loans re so desperate that they will sign up for any loan that gives them quick cash. This causes the debt cycle that Elliott found himself in, and he is advocating to help eliminate payday loan debt for people who have suffered at the hands of predatory lenders.
How Are Payday Lenders Fighting Back?
Payday lenders are arguing that they should not be subject to caps on interest rates. They say that they are not under the jurisdiction of the CFPB, and they believe that the Dodd-Frank Wall Street Reform bill prevents the regulation of their companies. These predatory lenders claim that customers will have less access to the products they need.
How Can National Payday Loan Relief Help?
National Payday Loan Relief can help with payday loan debt by showing people how to refinance these loans, how to pay them off quickly, or how to consolidate their debt with a loan from a reputable bank. Payday loan debt is a financial tool that people can use to change their financial fortunes, but they need to find someone who will help. If you believe that you are paying too much for a payday loan, you should seek help before you end up in the same position as Elliott.
Avoid Payday Loan Debt
While Elliott Clark is calling for an interest rate cap on all payday loans, he knows that companies out there can help people like him. He says that it is a debt trap that can harm people for generations to come, and he has firsthand experience in the matter. If a parent is stuck in the payday loan debt cycle, that will harm their children. If grandparents are still suffering from payday loan debt, they cannot enjoy retirement. The entire family will suffer from just one loan, and the loans could take so long to pay back that these families may never pay them off. Working with National Payday Debt Relief is a good option when you want to avoid Payday loan debt & recover from one of these loans.