Payday loans are unsecured loans for emergency situations. They can help those people who cannot get a loan from a traditional financial institution for reasons such as bad credit score or lack of collateral. These loans tend to have a higher interest rate since they are not backed by any collateral. Payday loans normally depend on only two things: whether a borrower has a bank account and a job. If those two conditions are met, then payday lenders are happy to lend money.
It is however found that borrowers do not make the most efficient use of payday loans. A staggering 70% of payday loan borrowers use proceeds from the loan to pay for things like gas and groceries rather than spending the money on emergencies. This tendency causes a lot of pain as borrowers end up renewing or extending their payday loans. Getting sucked into this kind of cycle is not a great situation for anyone to be in. Luckily, there are ways of intelligently settling payday debt.
The very first thing that you (the borrower) must do to settle your payday loans is gather information. Find out what is the principal amount you owe. Combine information for all the different payday loans that you have, if you have borrowed from multiple sources. Next, find out the interest rates, fees, and penalties associated with each payday loan. This way, you will have a clear idea of the total amount that you have to pay off to clear your debt. Next, you must also find out if your lender is licensed to operate in your state. If the lender isn’t licensed, then you may be able to get some relief by not having to pay interest and fees. This, of course, will depend from state to state. So, we move on to our next step.
If you are to get out of payday debt, you need to know the rules of the game. Find out what the laws are in your state regarding payday loans. Understand what your rights are as a borrower and how you can get relief in a legal way. As mentioned above, you want to do this research to find out if your lender if following all the relevant rules. This step is also important if you are planning to hire a settlement company because you will be able to have a much better discussion with legal consultants rather than sitting in a meeting feeling completely clueless.
Once you know the amount you owe, and what the fees and interest rates are, try to plan and pay the amount yourself. This is by far the best option for getting out of payday loan debt. If you have the means or ways to pay off every dollar owed, it is the most hassle-free and stress-free way of setting your house in order. One piece of advice: before you pay off your payday loans, make a detailed plan as to how you will manage your cash flow because you will experience significant cash outflow. Having a plan is as important as executing it.
If you are not able to pay off the payday loans yourself, look for a company that can help you become debt-free. Payday Loan Helpers is one company that specializes in payday loan settlements. The settlement company that you partner with should have an IAPDA certification. Check if the company is listed on BBB or if it is a member of the US Chamber of Commerce. Feel free to fill out the form below or give us a call. We can demonstrate our credibility in payday loan settlements. It is also important to read reviews or testimonials about the company that you want to partner with. Know their fee structure and think about how you will pay those fees. Lastly, ask for a guarantee and an assurance that, if the company is not successful in settling your debt, they refund the fees you paid them. Feel free to give us a call to know more about how we can help you.
Following some guidelines and spending some time trying to learn about the lender, the laws, and other basic details will give you a direction of thinking. The time and effort you put in will guide you to a clear path as to how you can settle your payday debt in the most efficient and stress-free manner. Besides the research, it is equally important to have the right partner by your side on this important journey. It can make a significant difference eventually. So, choose carefully and get out of payday debt.