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How You Can Get Out Of The Payday Loan Debt Trap

payday loan debt

These days, payday loans are very popular. Despite all the positive and negative things, fast cash is still the easiest solution. People who are in need of fash cash prefer to take out the payday loan. However, many predatory lenders are ditching consumers by applying some tricks. Many lenders are fooling people by approving a loan in a state where the payday loan is not even legal.

Many people are drowning in payday loan debt. But, payday loan lending is not legal in North Carolina. So, the lenders who are giving payday loans are illegal. If you are one of them who stays in with payday loan debt, then you should take the right step to get out of it.

Remember, having payday loan debt can be dangerous for your financial health. It can destroy your credit health as well. Thus, you should try to get out of your current payday loan debt as soon as possible.

What if you don’t repay your payday loan debt

Are you trapped in the payday loan debt cycle? If you had taken out too many payday loans and now you’re going through a credit crunch to repay them, you should try to get out of the debt as soon as possible.

If you don’t repay the debt, your financial life can be ruined by the lenders in many ways.

Here you go:

The lenders will call you for the money

Once you miss the payment date. You will start getting repetitive calls from the lenders. They can harass you for the money. Though they are not entitled to do that, they can still harass you without caring about the laws as they are illegal lenders.

They increase the interest rate on the loan

Not repaying the loan can increase the interest rate majorly. You will start accumulating further interest on the debt you owe to the lenders. You have to repay the principal amount with the interest rate charged by them.

You can fall into a vicious debt cycle

A payday loan is a short term loan that is meant to be paid back within 15 days to 30 days of taking it out, or the date that corresponds to your next payday. If you don’t have the resources to pay the payday loan back at your next payday and roll the balance over to the next month then you start getting charged an interest rate on the payday loan. Since this interest rate is very high, you keep falling in deeper debt.

You can get collection calls

If you don’t repay the payday loan, you will get debt collection calls for the recuperation of the money. When you default on your payday loan accounts and you wonder how to get out of payday loan debt, it is most obvious that the accounts will be turned over to the debt collection agencies and they will give you calls that will irritate you.

The lenders can withdraw money from your account

The payday loan lender can withdraw money without your notice. They can take out more money than you owe to them.

The lenders can file a lawsuit against you

If you don’t repay the money, the payday lenders can take to you the court to get their money back. If they win the judgment, they can garnish your wages.

How to get out of the payday loan debt trap in

Cash advances or short term payday loans can become cash trouble instead of cash relief if you keep defaulting on them regularly. Although these are meant to provide you instant cash within a span of 24 hours of application of the loan, you should take out a payday loan with great caution.

But, defaulting on payday loan causes your credit score to drop, your wages to be garnished, unauthorized debit from your account, and future loans to have an unimaginably high-interest rate.

However, there are ways to get out of the payday loan debt trap.

Consult with a debt consolidation company

When you’re drowning in the payday loan debt mire, you may consult a payday loan consolidation company so that they can negotiate with your creditors and lower the interest rates. You can combine all your payday loans through this option and end up making a single monthly payment to the consolidation company. The interest rate will be lower and you can easily save a considerable amount of money every month. The late fees are also waived off through consolidation.

Enroll in a consolidation program

To get out of payday loan debt, you can enroll in a payday loan consolidation program. Once you enroll, the debt consultant will negotiate with creditors so that the interest rates will be lowered and the repayment procedure will be enhanced. If you can tell them that you’re working with a payday loan consolidation company, they can stop calling you as they can get an assurance that they can get back the money that you owe them.

Settle your payday loan debts

Another option that you may choose is to settle your payday loan debts with a settlement company. As a portion of the balance will be waived off by the lenders, you’ll have to repay an amount that is much less than what you actually owe. This will facilitate the entire repayment procedure and therefore you can easily stop all collection agencies.

Lastly, stop accumulating further payday loan debt. Otherwise, you will not be able to get out of payday loan debt forever. If you see the unauthorized withdrawal, either close your checking account or impose a hard debit check on your account. If the lenders continue to do this, you have to report to the State Attorney General so that they can take the required steps to help you stop this problem that is draining off money from your wallet.

Remember, payday loans or short term loans, also known as the fast cash loans are the ones which you may be able to get without a credit check. So, getting payday loans is easy. But as these are given without credit checks, you will have to pay against high-interest rates. This can create problems for you later. Thus, it is said to better avoid getting payday loans.

Read More:- Why Borrow Payday Loans for Small Money Emergency?

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