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Advice on how to payoff debt from payday lender - The Bills.com Blog
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Advice on how to payoff debt from payday lender
Friday, Oct 12, 2007
Question: I need help. What is the easiest and legal way to payoff payday loans? Thanks
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.You can get out of this trap if you are a resident of one of the 12 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. You can find the list of the 12 states and a summary of your states' pay day loan statute at Paydayloaninfo.org - a website developed
by the Consumer Federation of America, one of the oldest and best respected consumer defense groups in the US. 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.
If you need other debt help, please contact a counselor - we have several online at: Debt Help
We hope that this helped you to Find, Learn, and Save!
Best,
Bill.
www.bills.com
If you need other debt help, please contact a counselor - we have several online at: Debt Help
We hope that this helped you to Find, Learn, and Save!
Best,
Bill.
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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