Posts Tagged ‘Fair Debt Collection Practices Act’

Using Consolidation Debt Loan Payday

Thursday, September 23rd, 2010

Do you have a large payday loan to repay? Consider consolidation debt loan payday. In 2009, the industry analysts reported that there are about 20,600 payday loan outlets in the United States with the annual loan volume of $30.3 billion and roughly $4.8 billion being the loan fees.

Given the money in loan fees and the number of loan outlets, it’s obviously a paying business. In spite of these loans being extremely expensive as compared to other cash loans, they are very popular. Ease of access with very little background check and paperwork are the prime reasons for this popularity. Sixteen US states and the District of Columbia protect borrowers by enforcing a cap on payday loan rates; service members are also protected by the federal laws. Besides this, Consolidation debt loan payday is another efficient way to help with payday debt.

Long durations and several rollovers lie at the very core of a successful payday loan business. The longer the borrower takes to repay the original sum, the more the interest and other charges add up. For the borrower, this means mounting debt and a vicious cycle that is very hard to break. Usually, lenders assign the task of recollection to a collection company who keep calling the borrower. A consolidation debt loan payday company can make multiple debts into one by handling all the debts for the borrower. The borrower only makes one monthly payment to the consolidator at a low interest rate. The company also negotiates for lower rates and handles all communications with the lenders.

The Federal Trade Commission, enforcer of the Fair Debt Collection Practices Act, offers these tips for consumers:

  • Choose a genuine company. The company must provide its name, street address, and phone number.
  • Always protect your personal information. Share your credit card and other personal information only with the companies you know and trust; never share it in an email.
  • Don’t be in a hurry, take your time. Read and understand the small print carefully before signing.
  • Select a plan that can be controlled by you. Consider factors such as interest rates.
  • Keep a close watch on the company activities. Calculate your monthly installments yourself.
    Report fraud to the authorities.

Filing for personal bankruptcy is the last resort to manage debt. Its results are long-lasting and far-reaching: bankruptcy information stays on the individual’s credit report for ten years. This can make it difficult to get credit in the future, buy a house, get life insurance, or at times even get a job. Using consolidation debt loan payday is a much easier option and if used cautiously can help ease the burden of a payday loan.

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The Fair Debt Collection Practices Act And How It Affects You

Friday, August 6th, 2010

Payday loans are notorious for having astronomical interest rates. If, for example, you take out a payday loan for $300, if you have bad credit, then payday loan companies may try to charge you an annual interest rate of up to 300%! There has to be a law against that, right? Well that’s where the Fair Debt Collection Practices Act comes in.

The FDCPA, or Fair Debt Collection Practices Act, is a United States statute which outlines how debt collectors are allowed to do business through eliminating unfair and often, abusive practices concerning the collection of consumer debts. This statute also promotes fair debt collection and provides consumers with a way to dispute and obtain validation of debt in order to ensure the accuracy of the information. In short, the Fair Debt Collection Practices Act saves you from bullies who might try to collect a debt that is much more than what you owe, or something that you don’t owe at all.

How Does the Fair Debt Collection Practices Act Affect Me?

Prior to payday lending laws, lenders charged pretty much whatever they wanted. As usual, people with bad credit or no credit at all, were the ones most affected by this, as lenders would often charge them annual interest rates of up to 900%. But they wouldn’t know this until it was too late because the fees would be buried deep within a load of legal jargon that nobody could understand. In 1978, the Fair Debt Collection Practices Act changed all that by forcing loan companies to be forthright in stating their fees and practices.

State payday loan laws keep these interest rates in check, but often, payday loan companies disregard these laws entirely. More than 30 states have payday lending laws which limit the interest rate a company can charge you. For instance, in Georgia the annual rate is 15% interest. In New York, the annual interest rate cannot exceed more than 25%. Payday loan laws are crucial in keeping in check payday loan companies that only want to cost you more and more money until you have run yourself into the financial hole you dug unintentionally.

Under the Fair Debt Collection Practices Act, all state payday loan laws state that the lender must have his/her contract written in clear understandable English. This contract must also have the fees upfront and in bold typeface print so the consumer can see how much they must pay to the loan company. If any of these things are not present within the contract, then the loan company is breaking their state’s payday lending laws and you should report them to the proper authorities immediately.

Fair payday loan laws are a very recent occurrence, and without the Fair Debt Collection Practices Act they never would have been implemented. Be sure to always check your state’s payday lending laws so you can avoid being ripped off when you can’t afford it.

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