Consolidate Payday Loan Debt
Payday Loan Help
Many older Americans have difficulty meeting their monthly expenses. A fixed
income can’t always cover a senior’s needs, particularly unexpected needs
associated with medical problems, home and car repairs, or even an old
refrigerator that doesn’t work anymore. Unfortunately, there are few resources
to help vulnerable seniors get through these hard times. Affordable small loans
are hard to come by. As a result, many seniors end up with very high cost small
loans, including payday loans.
How Do Payday
Loans Work?
Payday loans go by a variety of names, including "deferred presentments," "cash
advances," deferred deposits," or "check loans," but they all work in the same
way.
The customer writes a check to the lender. The amount on the check equals
the amount borrowed plus a fee that is either a percentage of the full amount of
the check or a flat dollar amount. Some payday lenders will offer an alternative
"automatic debit" agreement. Customers who sign this agreement give the lender
permission to automatically debit the customer’s account at a future date. These
automatic debit arrangements, in particular, are often marketed to public
assistance recipients and Social Security recipients.
The check (or debit agreement) is then held for up to a month, usually until the
customer’s next payday or until receipt of a government check.
The payday loan is for an amount of
cash that is less than the amount written on the check.
At the end of the agreed time period, the customer must either pay back the full
amount of the check (more than the amount of the loan), allow the check to be
cashed, or pay another fee to extend the loan.
The difference between the amount of the check and the amount of cash the
customer gets in return is interest or a loan fee that the lender is charging.
These types of short-term loans are always very expensive.
Payday loans are short-term, unsecured
loans that consumers agree to repay from their next paycheck.
They are priced at a fixed dollar fee, representing a high cost finance charge
to the consumer. Because this type of loan has such a short term of maturity,
the cost of borrowing is very high.
Payday Loan
Debt Consolidation 1(800)799-2160 Ext. 101
In our opinion payday loan companies are nothing more then a legal form
of loan sharking and are typical not affiliated with and reputable bank or
financial lending institution. The Payday Industry is plagued with greedy
lenders who look to exploit consumers who are a suffering financial hardship. It
not surprising that new lending and compliance laws have brought many "sharky"
payday lenders to their knees.
Many borrowers who
apply for payday loans have cash flow difficulties,
and very few use these high cost loans like most consumers would charge their
favorite credit card . In addition, many payday lenders perform minimal analysis
of the consumers ability to repay their payday loan debt. They typically only
require a current pay stub, proof of income and a valid checking account. More
reputable payday lenders utilize scoring model systems, track bounced checks,
Judgment debt, defaulted payday loan databases, and cross reference other nation
debt directories. Payday loan companies rarely obtain credit reports from major
national credit bureaus (Equifax, Experian, TransUnion). The combination of the
borrower's limited financial capacity and the limited financial credit analysis
make payday loans a losing situation for most consumers.
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