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All About Payday Loan Traps
Friday, Jun 6, 2008
Question: Since I have fallen into the payday loan trap things have gotten worse. My credit score is 545 due to my payment history. A lawyer advised me to get a consolidation loan for my debt of 12,000 to have everything paid off and only have the one monthly payment. Even at a high interest rate that would save my nerves. I am a divorced single mother of two with a daughter in college. Please let me know what you think. I've had all these shadey companies contact me trying to get me to send them money to "secure" my loan. I'm just a mess over this. I just want my credit rating back!!
Answer: You are right in being careful not to accept offers just from somebody who is trying to sell you a loan. Although I agree on what the lawyer has suggested (getting a loan to pay off these payday loans), I am doubtful of the possibility that you would be approved for a loan for $12000 given that your credit score is at 545 and you have a less than perfect payment history.There are other options available for consumers who find themselves in trouble with payday loans. You can get out of this trap if you are a resident of one of the twelve states where this type of loan is illegal once the effective rate
passes the usury cap in that state. Usury laws dictate the maximum interest that many lenders may legally charge. If the payday lenders follow their normal business model the loan will most assuredly pass the limit very early. New York State even has a criminal statute that sanctions the lender if the rate exceeds 25%. If you are in one of those states, the loan may be void, and you may be only liable for the principal amount borrowed. In addition, 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. Such a repayment plan may help you in paying off these loans.
You can find a summary of your state’s pay day loan statutes at www.paydayloaninfo.org a website
You can find a summary of your state’s pay day loan statutes at www.paydayloaninfo.org a website
developed by the Consumer Federation of America. If you go to the same site and click on consumer help, you will find a comprehensive discussion of the best strategies of how to cope with and get out of the payday loan trap.
A possible loan resource you may want to explore is www.Prosper.com, a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. If none of these options will work for your situation, Bills.com offers a wealth of information regarding the various debt help options available to consumers.
Bills.com offers additional information about payday loans on our Payday Loan Information page, available at http://www.bills.com/payday-loans.
I wish you the best of luck in repaying these payday loans. I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com
A possible loan resource you may want to explore is www.Prosper.com, a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. If none of these options will work for your situation, Bills.com offers a wealth of information regarding the various debt help options available to consumers.
Bills.com offers additional information about payday loans on our Payday Loan Information page, available at http://www.bills.com/payday-loans.
I wish you the best of luck in repaying these payday loans. I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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