Are you stuck in a Payday loan cycle?

10/9/2017


I hope this post helps even just one person today! As a financial counselor, payday loans are my pet peeve because they are so difficult for my clients to get out of. Payday lenders allow someone to “borrow against” their next pay check with horrendous fees, which are not considered interest because they are not traditional loans. The loan must be paid back by the next time you get paid, although there are some on-line lenders that have various schedules. I have also seen some where if they person cannot pay it back, the lender will allow someone to just pay the fee and let the debt cycle until they are able to come up with the funds to pay it off. 

I am all for businesses making a profit. And these places do not put a gun to anyone’s head to use them, so now that I have that out of the way- I’m going to tell you why these places are like quicksand. People run to them in a crisis. Maybe you have a shut off notice on your electric bill and fell behind on rent. Maybe a family member died and you want to help out with expenses. Maybe the car broke down. And they helped out. It may have got you out of a jam. Well, about for 5 minutes because now you owe $500 or $600 plus fees and it’s due in 12 days. I don’t know anyone that can actually afford to pay off a balance of $600 in that short of a time frame unless they have a tax refund or some spurt of extra money coming their way. The same bills coming at them this month, are heading again next month too! So what can you do? 

Well my first piece of advice, is close that bank account and start banking elsewhere ASAP. Stop any automatic payments coming out like Netflix and change to the new account. Yes the payday lender is going to be pissed off. Do I care? No. Once they can’t get the payment in a lump sum, they will be willing to work out a payment plan with you. There is also a non-profit debt counseling service that can create an agreement with them to pay back the debt in a max of 12 months. You can contact DMCC at 866-618-3328, and read up on them here http://www.dmcccorp.org/pay-day-loan/ to see if their program is for you.  You may also contact your state’s attorney general’s office to find out  what the payday lender can and cannot do if you default on the balance, according to your state laws. Finally, you can also include them in bankruptcy if you’re insolvent and can’t pay them back. 

Do not suffer through this nightmare cycle another day. Please take action and get control of your finances again! Reach out to a non-profit credit counselor at 800-388-2227 or find me on Facebook at Money Minds, or send me an email @ [email protected] for an assessment of your overall financial picture and what to do! 

Get a FREE Budget form that does the math for you! Compare income and expenses easily, which is the first place to start towards financial freedom. Get this free tool here
Lots of love,
Beth
Ways to connect with me:


Share this Post

Share on facebook
Share on twitter
Share on pinterest
Share on whatsapp
Share on email

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top

Get My 7 Step Blueprint to Financial Freedom