How To Get Rid Of Payday Loan Debt?

Introduction

Whenever a person is in need of money in order to manage expenses that he is not able to manage through the regular income and is not having the provision of credit cards or other secured financing options we search for the unsecured personal loan options available from various private financing institutions. Options available for those having poor or no credit history or lack in any asset to get the mortgage loan is the payday loans that various private financial institutions provide. Payday loans are famous for causing panic attacks to the borrowers. The repayment of the not so easy monthly installments of the payday loans is much difficult as compared to the ease with which they are approved.

Vicious Circle Of Payday Loans

Before learning the root cause behind the panic attack or the anxiety caused by the payday loans it is important to know what exactly the payday loans mean. Payday loans are unsecured personal loans with very high interest rate as compared to the credit cards or other loan options available. No credit history or credit score is required before issuing the payday loans neither the banks ask for any security against the loan. Most of the people grab the loan for wrong reasons rather than keeping the option open for emergencies.

All you need to be eligible is a bank account and a job certificate. Payday loans trap the borrowers in a vicious circle of high-interest installments that they fail to repay multiple times and are under stress about the repayment. They grab more payday loans in order to repay the previously issued loans and that is where the borrower lands his feet into the mud. High costs of the payday loans exhaust whole income of the borrower making it difficult to manage daily expenses. Learn about the possible escape from the vicious circle of the payday loans rather than panicking and taking the wrong decision.

Escape Options

The vicious circle of payday loans is not new. Almost all the borrowers are unable to pay the repayment of the payday loans as they did not plan the repayment at the time they took the loan. There are many help options available from both the companies as well as the state administration all you need to do is get the right start. For that, you need to shuffle all the available options by having the correct and sufficient information about them.

Extended Payment Plans

Inform The Lender

As the name suggests the lenders giving payday loans in order to extend the payment period of the loan amount opened this option. Check the lenders status as a member of the Community Financial Services Association of America (CFSA) in order to double sure about the availability of the extended payment plans. No extra fee is paid by the borrower in order to grab this option. On the other hand, if you default at repaying the loan usually accompany penalties and fees along with them.

Full-fill Requirements

There are certain requirements in order to avail of this option. The first thing you need to do is inform the lender to activate the extended payment plan. This intimation or information must be conveyed well before the due date of the regular payment. The lender will not charge any penalty or fees as far as you do not default the extended payment plans. The next step of the extended payment plans is to open the loan application and dissolve the previous agreement followed by signing the new agreement.

Avail Consumer Rights

In case the lender refuses to extend the payment plans for the payday loans, you need not worry and all you need to do is contact the concerned regulatory authority of the state in order to safeguard yourself against the payday loans. The regulatory body will take the necessary action depending upon the licensing status of the lender. You can also file a complaint with the consumer protection authorities in order to secure a written proof and an official record against the lender.

Get Alternate Loans

Most of the people consider trapped in the cycle of payday loans want to pay back the loans in one go in order to get mental relief. It might sound weird but the best option available is to undo the mistake and this can be done by finding the alternate lender providing a secured and better loan option with a lower interest rate and easy monthly installments. Repay all your unplanned payday loans and plan a proper repayment cycle for the new alternate loan.

Increase Income

If you ask a debt-ridden person, trapped in the vicious circle of the payday loans to increase the income, the person will nearly curse you for this. However, it is indeed the best option to get relief from your debts. The first thing you need to do is get yourself counseled and reconstruct your expenses. Next, explore all the alternate income sources keeping in mind not to do any illegal activity. Grab freelancing options and other employment opportunities along with keeping a tap on your expenses.

The Bottom Line

Unplanned and unsecured payday loans usually land the borrower into trouble. The borrower is stressed to neck about the repayment of the payday loans and the vulnerability to fees and penalties in case the deadlines are not met. The local body and the private companies established so many consumer safety norms in order to protect the borrowers of the payday loans from any mental stress and panic attack. Keep in mind to plan an escape by managing your expenses and exploring alternate but legal income plans to end the cycle of payday loans.

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