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Advice on payday loan payment options - The Bills.com Blog
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Advice on payday loan payment options
Question: I've heard it said that it is illegal for payday loan places to charge the interest they charge. I would assume it is not, since they are still in business. They have been helpful in a crunch, but I hate when they will only loan the money for a week with a 600% finance charge. I have sometimes asked for the loan to be extended tomy next payday, as I get paid every two weeks, but I know someone who got paid weekly, and was having the pay every payday. I thought they had to be given for at least two weeks. Any advice?
Answer: These small loans, often called cash advance loans, check advance loans, or deferred deposit check loans, are a frequent pitfall for consumers. A fee anywhere from $15-$30 per $100 borrowed is charged for an average loan of $300. With rates so high and the term of the loan so short, there?s no wonder that a very high percentage of these loans are rolled over by the borrower again and again so that the accumulated fees equal an effective annualized interest rate of 390% to 780% APR depending on the number of times the principal is rolled over. You will have to contact your lender to see if they are open to making payment arrangements. Unfortunately, you will find that in most cases the lenders are just too inflexible. You can
check out information online at Bills.com .
You may be in luck in regard to your difficulty in repaying these loans. There are eight states whose payday loan regulating statutes require lenders to set up an installment repayment plan if an account reaches the maximum number of rollovers allowed by law and the debtor declares that he/she is unable to pay the balance due. Check out the payday loan information from the Consumer Federation of America where you will be able to read all about these loans and the various state attempts to regulate them. Follow the state information link to find out the specific regulations for payday lenders in your state, and if you live in one of the eight states requiring installment payments. If your state does require repayment plans, and the lender still won't accept payments, call your state regulator of payday
loans, usually an assistant Attorney General, and complain. You should get the results you want after the Attorney General's office becomes involved.
If you are not in one of those states, you may want to consider simply making payments to the lender of whatever you can afford to pay down the balance of the loan over time. In most states, the rollover limit will soon be reached, and the interest rate the lender can charge will be capped by state law. If the lender will not accept your payments, simply put what you can afford aside each month until you have enough money to either pay off the loan or to offer a settlement. Read up on the regulations in your state to find the best strategy for your situation.
Hopefully, one of the strategies I have discussed above will help you resolve these payday loans, and help you Find. Learn Save.
Best of luck,
Bill
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1. Posted by Linda Tracy on Friday 16th May 2008 08:21
Payday loan companies may vary but all should have almost the same procedures. I take payday loans every now and then, I am paid weekly and I am always due every two weeks. I guess it depends on the type of company.