Payday loans often lead consumers to massive financial debt and even more budget problems. There are ways to get out from under an online payday loan. Keep in mind that some are not traditional and may not be the right way to really go about things, but the process actually works. It is also important to understand why people get payday loans. One of the best things to do is discuss your financial inability to repay all at one time and attempt to get an extension.
Loan Facility Not Licensed in your State
Now, it is important to read the fine print when you obtain an online payday loan. Not all facilities are licensed in all 50 US states. This is a plus for you if you should happen to take a loan with a non-licensed company. If they grant you the payday loan and you find out later that they are not licensed in your state, you are not obligated to repay the loan. It is actually illegal for a loan facility to extend funds to persons in states that they do not hold license in.
Close your Bank Account
Some may see this as dodging financial ruin but it is an option to consider. Speak with your bank about the potential for several bad checks to come in, causing you significant fees that you won’t be able to recover from. Ask about closing out the existing account and transferring your available funds to open a new account. When creditors attempt to deposit the checks, they’ll be returned. They’ll try to contact you for payment and at that time, you can attempt to make payment arrangements with them.
Discuss with the lender that you are experiencing financial hardships and can provide as much documentation as they need to prevent prosecution.
Make Payment Arrangements
Ask to make payment arrangements where the amount owed can be split up into multiple payments. This may not stop interest from building up but the payments will be more manageable, especially if you have multiple payday loans out.
Always remember to read the fine print of a payday loan, even if you obtain it online and not in person. Look for clauses or inclusions of potential extensions or payment arrangements being available. Also consider contacting the loan agent to ask about extensions being available in the event that a financial hardship arises and you are unable to repay the loan upon your next payday. Extensions are not always available depending on the lender and the regulations set forth by your state.
Money Beagle says
But the all time best way is to not take one out in the first place. As they say, an ounce of prevention….
Hugo Shelley says
Exactly. The best ways to get to loans, is to be responsible with your finances to avoid the need of taking out loans because, though it’s easier to get loans these days, paying them off is going to be harder.
Simon E. says
Am with Money Beagle here, the best way to avoid payday loans is not to take them first in the first place. But we are human…and stuff happens in life we aren’t ready for. In those cases, its best to negotiate a payment plan as soon as possible to avoid penalties.