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Advice on payday loan troubles - The Bills.com Blog
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Advice on payday loan troubles
Friday, Oct 12, 2007
Question: I have gotten myself in serious trouble with payday loans and i am looking for a way out. What can I do to get myself in better financial condition?
Answer: These small loans, also 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 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 statute requires 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 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.
Bills.com also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California , Florida , Illinois , Massachusetts , Missouri , Texas , and Virginia .
If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the Bills.com resource Collections Advice to learn more about the rights of creditors and debtors.
I can also point you to the Free Bills.com Financial Planning and Budget Guide, which can help you manage your finances and learn about budgeting and prudent financial management.
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
Bills.com also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California , Florida , Illinois , Massachusetts , Missouri , Texas , and Virginia .
If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the Bills.com resource Collections Advice to learn more about the rights of creditors and debtors.
I can also point you to the Free Bills.com Financial Planning and Budget Guide, which can help you manage your finances and learn about budgeting and prudent financial management.
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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