In this article, we will be taking a look at what these types of loans are, how they work and how they can both help and sometimes not help you.
When to get one and when not to really depends on your situation and what your understanding of these loans when it comes to using them or not using them.,
Before we go any farther lets first look at what a payday loan is and how they work.
Now that we are all on the same page with what a payday loan is and how it works let’s move on to what happens when you get in trouble with this type of debt and what your options may be.
Too many people across the USA are getting in serious financial trouble with these loans and we here at “Help With Payday Loan Debt” feel we must do what we can by educating people so they make the right decisions!
Payday Loans And Payday Loan Traps
Payday loans are loans where people can go either to a brick and mortar storefront or online and advance money against your checking account.
You only need to be employed and make at least $800.00 every two weeks to qualify for up to $1000.00 same day cash either over the counter or electronically deposited into your checking account.
This EASY money comes with an extremely high interest rate, usually, about $150.00 per $500.00 dollars borrowed.
To properly use one of these loans follow this procedure to the letter and do not deviate as if you do you could be in for the ride of your life with these companies!
- Never take out more than one loan
- Always make sure you can pay off the loan you are taking out in full on your first due date, period. This is of utmost importance because extending or rolling over your loan can lead straight into a payday loan trap.
- Never take another loan out to cover the first loans payment. This can also lead you straight into a payday loan trap and will cost you mega dollars before you break free!
- Never extend a payday loan, the same risk as above mentioned.
- Understand your terms of the loan and when using online payday loans*
*This last point is extremely important because when using the online companies they will only hit your account for the amount of interest owed every time you get paid unless you inform them you want the whole balance to be taken out of your account. You must do this no later than 3 business days before each due date.
If you do not do this you will be paying just the interest every payday and not touching your original balance. In other words, $500.00 borrowed for $150.00 in interest for two weeks will total $650.00, but if you do not inform these online companies that you want the whole $650.00 taken out of your account on your due date, they will only take the $150.00 interest charge out and leave you with the original $500.00 balance on your account!
Plus they will add another $150.00 interest to you balance owed leaving you will the same $650.00 balance you had before your payday!
This is the ultimate payday loan trap!
In summary, the only safe way to use a payday loan is to know the terms completely and pay off the loan in full on your first due date, period!
Payday Loan Consolidated Loans
These loan companies are the only saving grace in this whole payday loan business!
What they do is bail out the borrower and put them back on their feet, and they are a powerful and useful tool and many times the only way a person can fight back and get out of payday loan debt.
What the good consolidation companies do is priceless to the borrower and can give a person a piece of mind they have not had due to out of control payday loan debt!
Let’s take a look at how they work and what to expect and what to watch out for when looking for and using these services because, with everything good, there is also an element of bad!
How they Work
These companies will take over all of your payday loans and negotiate a repayment plan directly with the payday loan companies, thus taking you completely out of the picture!
What that means is you will no longer have to talk to these companies directly, as the consolidation company will be doing this for you going forward!
For a one-time affordable fee, they will combine all of your loans, renegotiate your balance by eliminating a good chunk of your outstanding interest owed, saving you mega bucks!
They will also make your bi-monthly or monthly payments on your behalf and they will keep these companies from calling and harassing you anymore. period!
They will only hold your first payment for a maximum of two weeks and never put off any work involving your payday loans during the hold period, unlike the bad companies out there that sometimes hold your money for a month or two!
What these consolidation companies should do for you:
- offer you a free quote of their services
- immediately stop harassing phone calls to you, your boss, your family, and your references.
- Stop all interest in its tracks!
- Stop all legal action
- treat you with respect
- Treat your loans like they are their own
- offer you the best payback plan available and one you can afford
- Approve everyone
- Only charge one fee
- Offer no hidden costs
- Have everything set up and ready to go by the end of the two-week holding period
- Educate you on how to avoid these traps in the future
These companies are a great tool to get you back on your feet financially, but as with anything there are so not so good companies out there just looking to exploit you even more than the payday loan companies and you must watch out for these.
so we better take a look at what to look out for!
What they should not do:
- Charge more than one fee
- Hold your first payment past the two week standard of the industry
- Wait to negotiate your account with your borrowers until the waiting period is over.
- Charge high fees
- Not offer education on how to avoid these payday loan traps in the future
Just like with anything there is a right way to do something and a wrong way and we want to make sure you understand all the right ways to do things with these kinds of loans and companies and also what to watch out for when thinking of doing business with them.
Out of control payday loan debt has let people to bankruptcy, depression and even thoughts of suicide, and none of this is necessary.
There is always a way out and we here at “Help With Payday Loan Debt” make it our mission to help as many people as possible put this kind of debt behind them the fastest and least painful way possible!
You can check out our Payday Loan Repayment Plan to see how we can help you!
Check out this video for some good points on these loans!