Can An Online Payday Loan Take You To Court

Can An Online Payday Loan Take You To Court?

Can An Online Payday Loan Take You To Court

Can An Online Payday Loan Take You To Court?

Known as payday loans online, deferred deposit loans or check advance loans – such are all short-term loans ranging anywhere between $100 and $1000 that appeal to individuals facing a difficult financial situation, offering them a quick fix until their next payday.

“Defaulting” on a loan, otherwise known as missing a payment, can bring about many different consequences including automatic withdrawals from your chequing account, bounced checks or payments, NSF (Non-Sufficient Fund) charges. This payday loan will affect your credit rating, can lead to repetitive calls from collection agencies and even worse – a lawsuit.

So, Can A Payday Loan Take You To Court?

Facing an overdue amount – no matter how small that amount may seem? Then chances have it that you’ll be taken to court for a lawsuit. It is important to keep in mind that no amount is ever “too small” to be neglected. More so, once the court judgement has been decided, further and even bigger problems can come to be, including property seizure. In most places in the states, a judgement is viable for ten years and therefore, any property you may put your hands on over the next ten years can be used to repay your debt and any additional fees that have accumulated over time.

Request Help Prior to getting Sued

If you know that you aren’t going to be capable of making your payments on your payday loan online, then your best option is to start looking for help before you ever even get sued. No matter what amount you are dealing with when it comes to your payday loan online, you should never tell yourself that such isn’t important enough. If a court order is what ultimately encourages you to take action, then we’re here to help you get through that, too!

Lawsuit For Unpaid Payday Loans

While a lawsuit for an unpaid payday loan is not just possible but actually probable, threatening or harassing someone with arrest or jail time for not paying back said loan is in fact illegal under the Fair Debt Collection Practices Act. In many scenarios, the lender will pretend to be a law enforcement officer or government agent in order to request their cash, alluding to possible jail time. In the case that you are threatened, you should contact the office of your state attorney general, as suggested by the Consumer Financial Protection Bureau.

Remain cautious though, for certain payday lenders have actually succeeded in using bad-check laws to successfully file for criminal suits. For this reason again, it is best to never ignore a court judgement because such orders are legitimate when it comes to failing to repay a loan.

Court Judgement

Just a small word of advice before we continue: Never, ever ignore a court judgement. Not showing up in court in order to discuss your settlement plan will only make matters worse – much worse, seeing as the creditor can now sue with the legal system on their side!

On a lighter note, failing to pay back a payday loan online is not considered a criminal offense and therefore, you can’t be sent to jail. However, the fact remains that a payday lender can still take you to court and cause you quite a bit of hassle.


Do Payday Loans Affect Your Credit Rating

Do Payday Loans Affect Your Credit Rating?

Do Payday Loans Affect Your Credit Rating

Do Payday Loans Affect Your Credit Rating?

Protecting your credit score is a big deal – especially if you’ve worked hard in managing your finances and building your rating. One of the biggest questions when it comes to payday loans online is whether or not such can affect a person’s credit rating.

Now, why such a question? Well, a negative credit score can leave you facing several other problems – including struggling to obtain future credit. Furthermore, obtaining a personal loan online, financing an engagement ring, getting a car loan and even requesting a bank overdraft with bad credit can all become difficult if dealing with a poor credit rating.

Do All Lenders Verify Credit Score?

If you are dealing with a regulated lender, chances are they’re going to verify your credit score. In general, this is either completed through a “soft credit check” which doesn’t affect credit score or a “hard credit check” which, on the other hand, leave a mark on your rating. In other words, a soft check gives a lender a good idea about the risks in lending money to you while a hard check provides a definite answer.

Do Payday Loans Online affect Credit Score?

Although we often talk about Égood” or “bad” credit scores, a credit rating is in fact much more complex. Overall, your credit score is based on your personal financial history and experiences. In other words, it is actually possible to have a negative credit rating simply because you haven’t had the opportunity to use credit just yet. This is often a situation faced by young applicants who have not yet had the time to prove their creditworthiness through debt and expenses.

You can also improve your credit score by a reasonable amount if you continuously make minimum payments alone. This occurs because you become an attractive prospect to lenders: You pay interest on borrowed money while continuing to meet your financial responsibilities.

Negative Effects of Payday Loans on Credit Ratings

Missed payments and defaults, otherwise known as missing a payment on a payday loan, causes the biggest negative impact on your credit score.

First of all, as with all debts and financial commitments, missing a payment negatively demonstrates your ability to responsibly and effectively manage your financial commitments. More so, missing payments can also indicate financial problems, causing harm to future scheduled payments as well.

Not paying your payday loan online back, whether by choice or because you can’t afford it, the negative marks on your credit report will quickly add up. Such marks, or defaults, remain on your credit file for at least six years, starting from their issue date. In other words, not repaying a payday loan online can affect how lenders evaluate your creditworthiness for over half a decade.

Keep in mind though, that is situation doesn’t uniquely apply to payday loans online.

Does the Application Process have an Impact on your Credit File?

Generally speaking, if a lender performs a soft credit check in order to evaluate your application, then no, such a verification will not directly affect your credit score like the hard check would. However, remember that a soft credit check is still marked on your credit report.

According to Experian, it is actually possible to have numerous soft credit checks on your report and such still wouldn’t have an impact on your credit file. This is because soft credit checks are not visible to other companies and therefore, don’t send out any indication of how many applications you may have already made.

On the other hand, a hard check remains on one’s file for up to 12 months and is completely visible to other credit providers or companies in the future who may equally perform their own verification.

In most cases, one application for a payday loan online, at the maximum two, is generally understandable. However, if you’re applying with several payday loan lenders then the marks on your credit score will quickly add up. Upon your next application, the potential lender will take note of the application trail and consider you of higher risk due to your numerous loan applications.

Aside from indicating to potential payday lenders that you are at risk and in desperate need of a financial loan, multiple applications can also indicate that other lenders have rejected your request. In other words, as a lender, it would be much more difficult to offer a financial solution knowing that the borrower is at high risk of not having the capacities to pay back the loan.

How Can you Reduce the Impact of Payday Loans on your Credit Score?

First of all, only apply for a payday loan online if this is absolutely necessary and all other options have been exhausted.
Secondly, you should be weary of how often you go about applying for such loans. Generally speaking, most lenders suggest waiting a minimum period of three months prior to requesting another payday loan online. Not taking risks is extremely valuable – if you want to increase your chances of acceptance, than make sure you’re following the basics from the get go. In all cases, don’t wait for rejection before taking action!

Summary

Your credit score defines how exactly you’re managing your finances – both over time and in the present moment. A payday loan online is an easy way to obtain quick money for short term financial problems. Keep in mind though that any type of credit can be used for or against you – improving or destroying your credit score.

Many factors can contribute to a negative credit rating, including missed payments on a credit card or even on a phone bill. If you’re looking to increase your credit score, then regular and successful payments on any type of short-term loan can be beneficial – especially when it comes to less costly financial solutions in the future.

How exactly a potential lenders views all this information is up to them and cannot be predicted. Prior to proceeding to any form of payday loan online request, make sure you obtain a copy of your credit report in order to make sure you know what things look like before doing so!


Can I Get A Payday Loan After Bankruptcy

Can I Get A Payday Loan After Bankruptcy?

Can I Get A Payday Loan After Bankruptcy

Can I Get A Payday Loan After Bankruptcy?

A payday loan online following bankruptcy – is this even possible? In short, yes. However, it is important to keep in mind that doing so will take both time and effort seeing as a bankruptcy negatively affects your credit rating for years to come. However, more challenging than even obtaining a payday loan online is finding a potential lender that doesn’t charge exaggerated interest rates with difficult terms.

If you’re looking to help increase your credit score through a payday loan online and using such to make your payments on time and in full after filing for bankruptcy, then planning, preparing and organizing for a a post-bankruptcy loan accordingly is of extreme importance in order to increase your chances of acceptance.

Getting A Payday Loan After Bankruptcy!

A Federal Reserve study concluded that, “Ninety percent of individuals have access to some sort of credit within the 18 months after filing for bankruptcy, and 75% are given unsecured credit” which demonstrates that genuinely obtaining a loan following bankruptcy is in fact less challenging than expected. More so, approximately 20% of the studied group successfully accessed a loan after bankruptcy. This is most likely due to the reasoning that once a borrower’s debts have been erased, their debt-to-income ratio will have improved, which is one of the main factors that a potential lender looks at when assessing risk.

Types of Consumer Bankruptcy

Consumer bankruptcy comes in two forms: Chapter 7 and Chapter 13. Both have different impacts and effects on your credit rating as well as on your chances of post-bankruptcy loan approval.

Chapter 7 Bankruptcy

First off, what is Chapter 7 bankruptcy? Here, you’re obliged to sell certain of your assets in order to pay back eligible outstanding debts. Generally speaking, a Chapter 7 bankruptcy provides more of a “clean slate” than does Chapter 13. However, according to myfico.com, Chapter 7 can remain on your credit score for up to ten years or even longer.

Following discharge from Chapter 7 bankruptcy, it may be more difficult to obtain a loan than with Chapter 13. This happens for a couple reasons. Because you don’t have to deal with a repayment plan, your file may appear less favorable to a potential lender.

Keep in mind that after bankruptcy, there’s no need to wait the complete ten years before improving your credit score. You can help decrease the impact of your Chapter 7 bankruptcy by incorporating good credit habits right away and holding on to them as your bankruptcy moves further into the past. The sooner your start building and improving your credit rating, the better your chances at obtaining a post-bankruptcy loan.

Chapter 13 Bankruptcy

We’ve looked at Chapter 7 bankruptcy, which erases all eligible debts, however, a Chapter 13 bankruptcy demands for a reorganization of both debts and income.

Through the court system, a 3-5 year repayment plan will be implemented in which you will have to make monthly payments to a trustee who then distributes the latter to the creditors who have filed a claim against you. Contrasting Chapter 7 bankruptcy, Chapter 13 doesn’t oblige the person to sell any of their goods or personal property in order to pay the debt off. In most scenarios, a person will primarily choose Chapter 7 bankruptcy initially but will opt for Chapter 13 if they don’t meet the eligibility requirements for the former.

Although initially, Chapter 13 bankruptcy looks a little more difficult to deal with – notably due to the monthly payments – it actually has a plus side. Chapter 13 bankruptcy doesn’t remain on your credit record as long as does Chapter 7 bankruptcy. More so, Chapter 13 bankruptcy doesn’t affect your credit for an entire 7 years. Establishing positive payment history and hence increasing your credit score becomes possible if you succeed in obtaining a loan during your bankruptcy repayment period.

When to Apply for Payday Loans after Bankruptcy

You can start looking at a loan immediately after your bankruptcy discharge – even though bankruptcy may remain on your credit report for the full ten years. Certain potential lenders are more open and willing to work with individuals who have this file type. Chapter 7 bankruptcy means that all your debts are paid back, you don’t have regular payments to keep up with, however the bankruptcy still remains in your history for an entire decade. Derogatory credit history including bankruptcy filing though influences your credit score every passing year.

For Chapter 13 bankruptcy though, repaying some or all of your debts is mandatory, usually over a 5-year period, sometimes 3. This form of bankruptcy is generally considered less damaging to your credit report and is displayed in your credit history for 7 years. While still paying your Chapter 13 bankruptcy, you have full rights to apply for a payday loan.

How to Prepare Your Loan Application

Are you interested in obtaining a payday loan online after bankruptcy, then you need to present yourself and your situation in the best possible light.

Obtain a Copy of your Credit File

Equifax, Experian, and TransUnion are the three credit bureaus of which you can obtain a free copy of your credit report once every year. Once in hand, make sure you’re verifying that all information is exact and up-to-date, equally make sure that your file is void of mistakes. For example, in the case of Chapter 7 bankruptcy, make sure that all your eligible debts were included and that such now display a zero balance. In the case of Chapter 13 bankruptcy, it is important to verify that all your payments are being applied in the right places.

Don’t hesitate to file a dispute if any mistakes appear on your credit report. Such can be corrected or completely removed if necessary, improving your credit score as a whole.

Verify that your Income is Correct

In many cases, providing proof of stable and sufficient income can greatly increase your chances of obtaining a loan, especially since credit score and history are only 2 of many factors that are taken into consideration when applying for a payday loan online.

Keep in mind that reportable income is based on actual and current income and therefore, if you’ve recently been given a raise, this should be included in your calculation. If you have access to any other forms of income, such as a spouse’s income or a salary you’re earning from a side business, then make sure you’re including this too. You can head over to your appointment with all the needed proof in hand: pay stubs, bank statements, a W-2, and tax returns.

Don’t Hesitate to Fight for your Case

Even if you application receives a refusal right away – don’t lose hope just yet. You can fight for your case. Explain what led you to declare bankruptcy in the first place and place an emphasis on your commitment to building and maintaining strong credit abilities. Although this doesn’t guarantee that the refusal will be overturned, it does however increase the chances of such.


How To Protect Yourself From Payday Loan Scam Calls

How To Protect Yourself From Payday Loan Scam Calls?

How To Protect Yourself From Payday Loan Scam Calls

How To Protect Yourself From Payday Loan Scam Calls?

When facing a financial emergency where you feel there is no way you, a payday loan online can become pretty tempting. Of course as many of us already know, such loans come with higher interest rates because of short repayment periods – but that’s not the worst of it. There are some individuals out there that claim they can get you a loan if you pay a deposit first. No reputable lender will ever ask you to pay a deposit on your loan in advance. Please make sure you understand that any one contacting you to do this is a scammer.

Defining a Payday Loan

Let’s begin with the basics: A payday loan is a small, short-term loan that usually ranges around $1000 or less. The funds are typically deposited within your account on your upcoming payday.

Payday loans are generally obtained from a brick-and-mortar payday loan store and ever more popularly, from an online lender. The online method is of course growing in popularity for its ease of convenience. Instead of having to move around and locate a store, you can simply find a payday loan lender and fill out an application through searching online. As easy as 1, 2, 3!

Generally speaking, qualifying for a loan is relatively easy, especially if you can demonstrate a good industry specific credit score or a steady source of income. Here is a list of certain informations that your potential lender is most likely request from you:

  • A bank statement indicating regular money deposits;
  • Your Social Security number;
  • A checking account (bank) number;
  • Your bank account’s routing number;
  • Typically a non-Industry specific credit check
  • Your phone number.

In many cases, your credit score isn’t even taken into consideration but industry specific scoring is from companies like Factortrust, CLVerify, or DataX.

Once the first step of loan approval has passed, you’ll move onto signing a contract with your said lender. Once completed, the requested money is deposited directly into your bank account. Loan repayment is equally pretty simple: You must ensure that you have the money in your account before payment day for your lender will perform automatic electronic withdrawals from your bank account.

Financial Scams surrounding Non-Existent Payday Loans

Here’s how a typical scam plays out:

  1. You receive a phone call from a scammer posing as a payday loan collector.
  2. You’re then accused by the fake collector of failing to repay a payday loan.
  3. The scammer threatens to sue if you don’t immediately transfer a payment, provide a bank account number or a credit card number.
  4. The scammer may also pose as a law firm or government agency and in this case, may threaten to deduct funds directly from your salary.

Keep in mind that a scammer can implement many different intimidation techniques, including threatening to inform your family and friends of your financial difficulties or scaring you with arrest if the debt isn’t paid off in full.

Of course, the bottom line is that you haven’t taken out a payday loan and therefore owe nothing at all. However, sometimes the scammer can be so convincing and threatening that certain individuals panic and perform the payment.

How Can I Avoid Falling into the Traps of a Scammer?

To begin, always keep in mind that despite not having taken out a payday loan, a scammer may still contact you, posing as a loan collector, law or government agent. If you’re looking at how you can avoid falling prey to one of these adept scam artists, consider the following tips:

  • If you believe you’ve been contacted by a scammer, make sure you file a complaint with the Federal Trade Commission and your state Attorney General’s office.
  • If in doubt, never provide and personal, financial or confidential information over the phone. In most cases, the scammer attempts to get you to pay immediately – so don’t pay a dime unless you know the debt is genuine.
  • Demand a written confirmation prior to paying any debt. A scam artist will most likely refuse.
  • Turn the tables and obtain the caller’s information instead: Request their name, company name, street address and telephone number. If such information is refused, you can rest assured that the person on the line is most likely a scammer. If the caller actually provides the requested information, take the time to give them a search online to discover whether or not their legitimate. Start by looking at the Better Business Bureau!

In the end, financial scams stemming from non-existent payday loans are real and cause quite a problem if you happen to fall prey to one of them. However, if you keep the above information in mind when it comes to dealing with possible scam artists, then you’re increasing your chances of staying far away from the problem!


How To Get Approved For A Payday Loan Online

How To Get Approved For A Payday Loan Online?

How To Get Approved For A Payday Loan Online

How To Get Approved For A Payday Loan Online?

When facing a financial emergency where you feel there is no way out, getting approved for a payday loan can be of great help. Despite being known for their high interest rates, such loans provide quick and easy cash when in urgent financial need. This may come as a surprise, but payday loans online are in fact quite popular among specific borrowers!

Generally speaking, payday loans have high approval rates when compared to conventional bank loans. Furthermore, a payday loan is typically approved within a few hours and funds almost immediately deposited into your bank account sometimes in as little as 24 hours. That all sounds great, right? Well, it’s equally important to keep in mind that many requests are in fact rejected – it all comes down to the individual criteria.

7 Tips to Getting Your Payday Loan Approved

Are you in desperate need of a payday loan and looking to help ensure approval? Read on and take note of the following 7 top tips and tricks to increase your chances:

1. Demonstrate Reimbursement Capacities

Lenders will want to assess your level of risk before even thinking of providing you with a loan and one of the methods they do so is by ensuring that you can reimburse the payday loan. Moreover, the total amount of the said loan often goes hand in hand with your reimbursement capacities. You can demonstrate your ability to repay a personal loan through proof of incoming or the use of a cosigner.

If you choose to go with a cosigner, make sure you are choosing a responsible individual, who has good credit score and is aware of the risks. If you fail one of your scheduled payments, your loan provider will request the sum from your cosigner. Furthermore, your cosigner will equally have to demonstrate their reimbursement capacities through proof of income. In many cases, having a cosigner can help ease a lenders worries in terms of lending to someone with a riskier credit report.

2. When Applying, Don’t Lie

When it comes to requesting a payday loan online, nothing good comes of lying. In fact and in most cases, your lender will probably discover your lie and you’ll ruin any chances of ever getting accepted for a loan in the first place. Keep in mind that your problem won’t necessarily end there – your potential lender can also warn other professionals in the field, keeping you from obtaining a loan from others as well.

To avoid any of the latter problems, provide only absolute, honest and correct information in terms of your application.

3. Be Timely with All Requests

Your lender is guaranteed to request certain information on your behalf, including certain documentations. Make sure that all requests are fulfilled in a timely manner, including providing the requested papers and forms. Your loan application process depends on such documents, and such can be delayed or stopped altogether if you fail to fulfill requests on time.

Read the loan application carefully and be sure to attach all requested documents. Even after this is completed, it is still possible that your lender requests additional information and this too has to be provided as quickly as possible.

4. Positive Credit Rating

Alright, before you start freaking out – no, your credit score isn’t the biggest factor when it comes to obtaining a payday loan. But let’s face it – a positive credit rating can definitely go a long way.

When it comes to a lender, you know they’re performing credit checks – even if advertising that credit and ratings don’t matter. As you know, a higher credit score increases your chances of approval so, keep an eye on your credit report, reimburse due payments, dispute any errors and keep your score above 760. Above and beyond this number, you can rest assured knowing that your report is in good shape. However, anyone under the 490 range has some work to do – for this score is considered rather negative.

5. Work Towards Improving your Score

So, you’ve got a bad credit score: 490 and under. Don’t panic. A bad credit score can actually be improved within the matter of months if you work towards bettering it in the right way. Start by paying down debt, paying all your bills on time and maintaining low credit balances. Of course, this takes a little time and a lot of commitment, but is definitely doable if you give it what you’ve got.

More so, keep in mind that although it’s best to work on improving your credit score before requesting a payday loan, sometimes emergency situations have it so that this isn’t possible. Obtaining a loan is still possible with a low credit rating, despite being slightly more difficult.

6. Search for Lenders who Accept your Credit Rating

As earlier mentioned, a poor credit score doesn’t impede you completely from obtaining a payday loan. In a financial emergency, you probably won’t have the needed time to improve your credit score and therefore, you’ll have to start searching for lenders that work with clients having a bad credit rating.

Every payday lender has their own set of requirements and many of them aren’t set in stone. In other words, certain lenders might not consider an applicant with a score of 600 and under while another lender will, as long as you can demonstrate repayment capacities.
Make sure you aren’t getting yourself into more trouble by falling into the hands of a loan shark. Always request payday loans from reputable and credible agencies.

7. Verify Your Debt to Income Ratio

If you’re looking to increase your chances of payday loan acceptance, then take the time to verify your debt to income ratio and request a reasonable loan. For example, if your total monthly income ranges around $2000, no lender will approve a $1000 loan. In fact, you’ll greatly increase your chances of acceptance if you’re only requesting a fraction of your income, in this example, perhaps $200 or a maximum of $400. Simply remember, the lower the request, the higher the chance.

In the end, when it comes to applying for a payday loan, there are many factors that come into play and many of such can increases your chances of acceptance. Keep in mind that lying for any matter in terms of your request won’t improve your chances – nor will lying about or exaggerating your monthly income. You’ll have to demonstrate stable income and therefore, part-time or freelance work is usually not taken into consideration.


Why Do You Keep Getting Denied For Payday Loans Online

Why Do You Keep Getting Denied For Payday Loans Online?

Why Do You Keep Getting Denied For Payday Loans Online

Why Do You Keep Getting Denied For Payday Loans Online?

If you keep getting denied for payday loans online, don’t take it too personally. After all, it’s just a computer on the backend making the decisions, right?

Much like a doctors warning in terms of high-cholesterol can be a patient’s wake-up call to leading a healthier lifestyle, loan rejection might just be the wake-up call needed to clean up your credit score if you keep saying to yourself: I need a payday loan but keep getting refused. Think of it this way: Being rejected for a loan may keep you far away from possible consequences in the future.

Common Reasons for Denying your Application

1. Having too many Current Payday Loans

When applying for a payday loan, one of the first thing a lender looks at is whether or not you can afford the loan. Part of the application process entails looking at your actual financial situation.

  • For certain lenders, rejection may be deemed fit if you’re requesting a loan to pay off another financial engagement.
  • You may equally be rejected if you’ve received more than one payday loan within the last 90 days
  • You can also be rejected if you are currently repaying a payday loan.

2. Your Salary is Paid in Cash

As earlier mentioned, lenders need to verify your current financial situation and therefore, being paid in cash can cause a few problems. If a lender can’t verify your income, you have high chances of being rejected. A lender will verify your bank statements and if you aren’t depositing your cash every pay cycle, then you aren’t leaving an online trace, making it impossible to check. If this is your case, then start looking for a lender who can verify your income through your payslips.

3. You’ve Filed for Bankruptcy

Lenders use a lot of information stemming from your current financial situation in order to determine the risk in lending money to you. Having filed for bankruptcy within the last year will most likely have your request stamped as high risk – and you might see yourself rejected. Don’t worry though – if you’re dealing with recent bankruptcy, there are other options for you.

4. You Have No Job

Let’s face it – without stable income, you’re likely to be rejected, for many lenders will question your ability to repay the loan in the first place. Sure, certain lenders may take the time to consider an unemployed applicant, however such an individual must still demonstrate a stable source of income – be it governmental benefits, work or otherwise.

5. Recent Overdrafts

A dishonored payment occurs when a creditor attempts to retrieve money from your account however, there isn’t enough money to cover the fee. If your bank account history displays a history of overdrafts, you’re more likely to be considered a risk and hence, your request rejected.

6. Attaining Minimal Requirements

Most lender’s have a specific list of mandatory criteria for payday loan acceptance on their website. It is highly recommended that you take the time not only to read such criteria, but to make sure that you meet such established standards. If you don’t meet the said list of criteria, you will most likely see yourself rejected by this lender.

Additionally, many lenders equally have an internal scoring system where points are provided in order to determine your eligibility for a loan. If your score isn’t ultimately high enough, this is another reason your request may be denied.

There Are Many Lenders!

Although this has to be completed properly and carefully, it is equally possible to apply for a payday loan from more than one lender. Acceptance criteria can vary from one lender to the next and therefore, despite a previous refusal, you still have chances of being accepted.

Avoid lining yourself up for repeated refusals and don’t keep applying if you have very poor credit score or a very high debt-to-income ratio. Always keep in mind that hard inquiries also directly affect your credit score in a negative way and the mark can last up to an entire year!

In Conclusion

If you’re facing a rejection for a payday loan – look at the bright side. Such a refusal can really give you the opportunity to carefully evaluate your goal and assess how you can obtain the funds in the quickest means possible. You can take advantage of this time to better your credit report and dispute any credit errors if needed. If you need the money right away, you can consider obtaining a payday loan from a different lender or start looking into different options altogether.


How To Get Out Of Payday Loan Debt

How To Get Out Of Payday Loan Debt?

How To Get Out Of Payday Loan Debt

How To Get Out Of Payday Loan Debt?

You might recognize the following situation: You’re running low on money, you credit card is completely maxed out and your family and friends are out of the question when it comes to borrowing cash. A $250 payday loan hence becomes a quick, simple and innocent situation. You tell yourself that such a loan is absolutely harmless – by your next paycheck, you’ll have paid off the loan as well as the additional fee and be back on your debt-free feet.

But all of a sudden – things don’t seem to be going as planned. You quickly run low on cash once again and repaying your loan is out of the question. Instead, you choose to pay an extra charge in order to extend for another 2-week period. In 14 days, you’ll either be capable of paying off the original debt plus fee or, you’ll have to pay a third time in order to extend your payment once again.

Otherwise known as the payday loan debt trap, this vicious cycle can continue for months and months. After a year, you will have paid $975 in additional fees simply to borrow the original $250. Keep reading if you want to learn how to save yourself from a debt and how to stay away from such a trap for good!

Ways To Get Out The Payday Loan Debt Trap!

Getting yourself out of a vicious loan cycle is in fact possible – and there are many different ways to go about doing so. The most important factor in choosing which strategy best fits your needs is your financial situation. Start by creating a budget and looking at your expenses – more particularly, where you can start cutting. In order to free up a little cash to pay back, you’ll have to start setting some money aside. Pay close attention to money spent on restaurants, clothes shopping or various travels for these are the easiest to start cutting back on.

Just cutting in your extra expenses may not be enough in order to cover your debt and quickly, so the next costs you should take a look at are your medium-necessities, including cable, internet, cell phone, car or rental insurance premiums. If one of the above appears less needed at this time, you can cancel the service altogether. Otherwise, don’t hesitate in contacting the concerned company and negotiating a better price for your needs.

The final area to look into are your larger expenses, like car payments and rent. If you’re really dealing with financial issues, you can start thinking about taking more drastic measures. For example, you can sell your car and find a less-costly means of transportation. You can equally move to a location with a lower cost rent or even find a roommate in order to help with the cost of rent.

In the end, the most important part is finding the necessary money to help you get out of debt and catch up as quickly as possible.

Request a Smaller Loan

Prior to actually requesting, make sure you have the necessary income in order to pay the loan back. With a reliable income, you can request a smaller loan from a bank or credit union – keeping in mind that you’ll have to make regular payments in order to pay the loan back. If you go about applying for your loan correctly, you can not only get yourself out of your short term money problems but you can equally improve your credit report if you succeed in making all your payments on time.

Talk to you Family and Friends

We know this option isn’t available to everyone – but it’s worth discussing and equally worth attempting. Requesting money from family or friends is rather a popular suggestion when it comes to financial problems. By asking for one lump sum from someone you are close to and can trust, you can pay back your loan in a single payment, avoid interest fees, and repay your friend or family member in small payments. Generally speaking, friends and family are also interest free making this route the prefered one if you’re struggling to make ends meet.

How Payday Loans Can Lead to Bankruptcy

In general, most payday loans are secured through accessing a borrowers online checking account or by receiving a signed check from the borrower in the amount of the loan plus the lender’s additional fee. In other words, this means that if a borrower doesn’t make their payment on the decided date, the lender can withdraw the amount directly from the borrower’s account or cash the signed check.

If this occurs and the borrower doesn’t have the necessary funds in order to cover the payment, the check or withdrawal will bounce and another additional fee will be incurred, impacting the borrowers credit score. If this happens on a continuous basis, one may see their bank account closed by their bank – making it difficult to reopen a new one.

All in all, the vicious payday loan online debt cycle can be pretty scary and honestly, pretty easy to fall into. If you don’t have any other option than borrowing a loan, then make sure you are requesting a reasonable amount that you will be capable of paying off by the scheduled date!