Archive for June, 2010

Getting Out Of Payday Loan Debt Is Easier Than You Think

Monday, June 28th, 2010

Are you strapped by debt from your payday loans? These loans, intended as emergency sources of quick, easy cash, can become debt traps for the unwary, and getting out of payday loan debt can seem virtually impossible. Because they are unsecured loans, payday loans tend to have extremely high interest rates, as high as 15 to 25%. Furthermore, if not paid back by your next pay period, the loans are extended for even higher interest rates. Debtors trapped in this vicious cycle often end up owing more in interest than the original principal they received from the loan. A good solution to this problem is to consolidate payday loan debt into one manageable monthly payment.

There are several payday loan debt solutions that offer reasonable alternatives to the debt trap. Debt consolidation allows you to negotiate lower interest rates on your existing loans and roll your multiple monthly bills into a single payment. With a debt consolidation program, you can also waive late fees, eliminate harassing collection calls, repair your credit rating, and avoid bankruptcy. Dealing with the debt isn’t impossible, and if you choose wisely, you can eventually become debt free.

Find The Right Solution For You

There are several solutions for getting out of payday loan debt, depending on the assets and resources you may have available and the size of your debt. You can find a good debt consolidation company that offers a debt consolidation program. The company will negotiate with your lenders and help you set up a payment schedule that both you and they can live with. You will have the advantage of a single payment every month, at a reduced interest rate, and avoid late fees and calls from bill collectors. Be aware, however, that taking advantage of a debt consolidation program can have a negative impact on your credit rating.

If you have the resources available, you might take a second route for getting out of payday loan debt – a debt consolidation loan. There are two loan options available to you, an unsecured loan and a secured loan. If you are a homeowner, you can get a secured loan, using your home as collateral. This is often referred to as taking out a second mortgage, and offers many of the advantages of the debt consolidation program (single monthly payment, lower interest rate, no late charges) without harming your credit score.

If you do not own a home, or do not want to risk putting up your home as collateral, you can apply for an unsecured loan. These loans generally have higher interest rates, but do not require any collateral. If you are not sure that you can make the monthly payments, an unsecured loan might be a better choice. Whatever loan you choose, be sure to carefully review the terms and conditions, and make sure that you can fulfill the requirements for repayment.

Whatever route you choose, you can consolidate payday loan debt and find a plan for financial solvency that works for you. Getting out of payday loan debt will open up a whole new financial world for you, and with careful budgeting and planning you can enjoy a future free of financial stress.

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How To Prevent Debt Collection Harassment

Sunday, June 27th, 2010

Unfortunately for many, debt collection harassment is unavoidable – bills pile up and the phone calls start and seemingly never end. With careful management and some assistance, it is easy to end this cycle of nuisance.

Most creditors outsource to collection agencies to enforce payment through traditional methods like phone calls and letters. When that doesn’t work, the collection agencies resort to other tactics. It comes in many forms, from threatening legal action and wage garnishment to downright verbal abuse.

Before becoming the victim of debt collection harassment, try to work with your creditor. Avoid having your debt reported to a collection agency by calling your creditor and explaining that you are under financial duress, but understand your obligations. Attempt to negotiate a payment plan to end your debt with your creditor.

There are many online tools and calculators that you can use to establish a time frame of when you will be debt-free. With realistic milestones in place, you can in turn, give your creditor a guarantee that you are actively working to end your debt and will ensure regular payments in the future.

If you are already experiencing debt collectors harassment, you can send a letter to the collections agency asking them to cease communications with you. American consumers are protected from this trouble by federal law after a collection agency has been written a cease letter. Be sure to keep a copy of this letter for your own records.

In the worst-case scenario, if the problem does not cease, you can pursue legal action against collection agencies. Consumers have increasingly found that a cease letter needs to be paired with threat of legal action for harassment to end. Consumers that are represented by a lawyer are protected from debt collectors harassment and agencies must end contact as long as your lawyer responds to the collection agency’s inquiries. 

Another resource for those in debt is, to seek the assistance of a debt consolidation firm. With counseling and guidance, a consumer can not only make a plan to eliminate their current debt, but will also gain the education to prevent getting into future debt.

With a debt consolidation firm, you will have just one debt-carrying bill to pay each month instead of several. This will give you opportunity to get your finances back on track and perhaps even put money aside each month for savings. A debt consolidation company can also work with your creditor to make sure that the harassing phone calls and threatening letters are all but eliminated. Again, because you are only dealing with one company—who is working to help you eliminate debt—you will no longer have to dodge phone calls from collection agencies.

The Federal Fair Debt collection Practices Act protects American consumers from being abused and harassed by debt collectors. If you feel that you are a victim of severe debt collection harassment, take action and fight back.

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Posted in Debt Consolidation, Payday Loans Debt Consolidation | 1 Comment »

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