Posts Tagged ‘get out of payday loans trap’

How To Get Out Of The Payday Loan Trap

Falling into the payday loan trap is as easy as is obtaining a new pay day cash advance. Therefore, if you are considering borrowing these small, short-term cash advances, you have to be very careful with your decision. First of all, it is very important for you to keep in mind that payday loan is not easy money; it does provide you an easy source to get instant money at a time when you need it, but it is still a debt (an extremely high-cost debt), which you have to repay. If you fail to make the repayment in time, you are into big trouble; the outstanding debt when defaulted grows very fast; within a few weeks, just a $300 of outstanding balance on your payday loan account can turn out into a $1000 of debt or even more, depending upon the interest rates that are being charged by your payday lender. The interest rates on these loans can range from just 200% per annum to over 700% per annum. The situation becomes worse when you acquire multiple debts from several payday loan companies. The good news, however, is that there are still plenty of ways to get out of the debt trap caused by the predatory payday lending. Following is a brief rundown on it.

Stop Acquiring More Debts

When it comes to getting out of the payday loan trap, the first thing ou have to do is to stop taking more payday loans. This is the time to learn from your mistakes. No matter how urgent the financial requirement you are facing is, you should always look for better, cheaper alternatives. If you fall into the similar kinds of situations again and again where you have to look toward payday cash advances as the only solution to met your financial requirements, it simply means that you are either financially not disciplined or your regular monthly income is not sufficient enough to meet all your needs. The best solution for this scenario is either to create and implement a budget plan or to improve your earning capacities (such as by getting a second job or doing some part time freelancing jobs). The point here is that you must stop obtaining new payday loans, no matter how tough the financial scenario looks like.

Know The Laws Of Your State

Getting out of the payday loan trap becomes much easier when you are also well aware of the payday loan laws of your state. Here, it is very important for you to keep in mind that the laws regarding payday lending vary significantly from one state to another. In fact, payday lending programs are not even legal in all states; at present, there are sixteen states that have imposed a complete ban on all sorts of payday loans. Another important thing that you have to keep in mind in this regard is that the laws off your state apply to all types of payday loan companies regardless of where their offices are located at (even Internet based payday lenders must follow the payday loan laws of your state as long as they are issuing a cash advance to you). The idea behind getting informed about these laws is to find out if your lenders are following all the laws thoroughly or if there have been certain violations of the laws.

Talk To Your Lenders; Negotiate A More Affordable Repayment Plan

In case, you notice that your lender has violated

certain laws, you must immediately talk to your lenders about it. Tell them that you are aware of your legal rights and the laws applicable in your state for payday loans and that if they do not offer you an affordable repayment plan in compliance with the laws, you are going to take legal actions against them. You have the right to file official complaints against illegal lenders to the relevant authorities; besides that, you can even file a lawsuit against the lenders and demand for compensation for the psychological and financial torture caused by their illegal practices.

As a last resort, when you find it impossible to manage your debts on your own, you always have an option to get help from debt relief companies. There are many payday debt consolidation companies that can help you get out of the payday loan trap. But, here again, you have to be very careful with your selection of the right company because many of them are just scams; but there are genuine and legitimate ones as well.

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