Payday Loan Consolidation and Payday Loan Relief Options – Guaranteed to Save You Money
Are you struggling to pay off payday loans? And are you interested in learning how to consolidate payday loans and get out of debt?
The good news is; Payday loan relief programs are available as of 2022.
The following payday loan relief guide will answer the most frequently asked questions about repayment, consolidation, and settlement options. We’ll teach you what you need to know to put an end to your payday loan problems and achieve financial freedom.
Interesting (and scary) payday loan statistics and facts:
- If you’ve ever traveled to San Diego or Los Angeles, you probably have noticed payday loan firms on almost every corner. California has the highest number of payday lenders. Texas has the second most payday lending firms.
- New Mexico has the highest number of payday loan companies (i.e., 41.78) per every 100,000 consumers. South Dakota has the highest number of payday loan firms with 40.01 per every 100,000, and then Mississippi with 38.67 per every 100,000.
- The average payday loan will cost the borrower more interest and fees than they borrow. For example, if you borrow $300, you’re likely to pay more than $450 in fees. You would end up paying a total of $750 on a $300 payday loan.
- According to Experian, “payday loans are one of the most expensive ways to borrow money. It’s not uncommon for the annual percentage rate (APR) on a payday loan to exceed 300%, which is extremely high compared with the typical credit card APR of roughly 16%.”
- 70% of payday loans get used for everyday expenses, including food, cell phone, and credit card bills.
- The average payday loan term is about two weeks.
- Another statistic; “Payday loans typically cost 400% annual interest (APR) or more. “This disclosure was listed on PayDayLoanInfo.org.
- The finance charge on payday loans ranges from $15 to $30 to borrow $100.
How Can I Get Rid Of Payday Loans Debt?
You can get rid of payday loans with debt resolution, settlement, and consolidation programs. But before you resort to a consolidation loan for payday debt, consider all of the following options.
Consumer Credit Counseling for Payday Loans
(1) Consumer credit counseling companies may try to reduce the interest rate on these types of loans. You will then make one payment every month to the credit counseling company, and they will disperse the payments to your creditors but at a reduced interest rate.
Can Payday Loans be Included in a Debt Management Plan (DMP)?
Some debt consolidation companies will include payday loans in a debt management program. However, not all payday lenders work with a debt management plan (DMP). So make sure to verify that your payday loan’s interest rate will get reduced through the DMP, and they’re not just including the debt offering you no benefit.
Payday loan settlement option
(2) Debt negotiators will negotiate a settlement on a payday loan allowing the borrower to pay off the debt for less than the total balance. You could end up paying much less than the total debt owed; however, credit scores are negatively affected by payday loan settlement options.
Payday loan debt consolidation option
(3) Debt consolidation loans can be used to pay off expensive payday debt with a low-interest loan. In addition, you could pay off multiple payday loans through payday loan consolidation.
Reduce balance on payday loans
(4) Debt resolution programs use a combination of debt validation and debt negotiation strategies.
As you’re probably aware, payday loans are the most expensive type of debt, often charging unfair fees and, if challenged, could prove to be legally invalidated. Consider that the average interest rate on a payday loan is far above 100%. That’s the definition of predatory lending. A debt resolution program uses federal laws to challenge the validity of a debt.
And when it comes to payday loans, there are federal laws in place that can help you fight the debt and win, not having to pay it.
FTC laws to protect consumers from payday lenders
“The FTC enforces a variety of laws to protect consumers from payday lenders. The agency has filed many law enforcement actions against payday lenders for, among other things:
- engaging in deceptive or unfair advertising and billing practices in violation of Section 5 of the FTC Act;
- failing to comply with the disclosure requirements of the Truth In Lending Act;
- violating the Credit Practices Rule’s prohibition against wage assignment clauses in contracts;
- conditioning credit on the preauthorization of electronic fund transfers in violation of the Electronic Fund Transfer Act;
- employing unfair, deceptive, and abusive debt collection practices.
- The FTC has also filed recent actions against scammers that contact consumers in an attempt to collect fake “phantom” payday loan debts that consumers do not owe.
- Further, the FTC has filed actions against companies that locate themselves on Native American reservations in an attempt to evade state and federal consumer protection laws.”
source: FTC, Payday Lending
Debt resolution forces a collection agency to prove the following:
- The amount they claim you owe is valid and accurate, void of unauthorized and unfair fees
- The fees and cost they are charging you is compliant with consumer protection and federal laws
- They are legally authorized to collect the debt by producing complete and accurate records and documentation. Federal law requires specific documentation to be held by a third-party collector. For example, this documentation could include everything from the original payday loan contract you signed, complete accounting records, and much more.
- They are abiding by all federal laws and regulations.
A legally invalidated debt could offer the borrower the least expensive route to escape payday loans and remove them entirely from their credit report.
Call (866) 376-9846 to speak with a debt counselor for FREE.
Learn about a debt resolution program to help with payday loan debt
Pros and Cons of Payday Loan Debt Consolidation
(1) First, let’s consider payday loan consolidation:
Using a loan to pay off a payday loan is the most expensive route to becoming debt-free. Think about it, replacing one debt with another debt. How is that helping you? Payday loan consolidation is not worth it, especially when using a costly online lender, such as Lending Club, Avant, or Affirm.
(2) Second, consider payday loan relief programs:
Is your goal to save money? Payday loan relief programs can offer you the best savings.
However, debt relief programs can negatively affect a person’s credit score because they must fall delinquent on payments to qualify for debt settlement.
So, in a nutshell, you should use payday loan consolidation if preserving a high credit score or improving your credit score is a top priority. But, on the other hand, if your goal is to save money and get rid of debt fast, debt relief programs will be a great option.
What is the best way to pay off payday loan debt and improve your credit score?
The debt snowball method is the best way to pay off payday loans fast while simultaneously improving credit scores.
What is the best payday loan relief program?
The debt resolution program through GFS offers the chance to resolve a payday loan debt for less than the total balance and get credit repair.
Part 1 of debt resolution program for payday loan relief
First, consumers must fall behind on monthly payments.
Accounts get written off within six months and sold to third-party collection agencies.
Disclosure: Your credit score gets negatively affected over year one, while accounts fall delinquent due to late marks and collections.
Part 2 of debt resolution for payday loan debt relief
Part two uses debt validation to dispute the validity of each debt. And debt validation isn’t saying “the debt was never yours.”
Instead, validation forces your creditors to produce accurate and complete records to prove that they are legally authorized to be collecting on the debt.
How can my payday loan debt be invalidated?
Unauthorized fees get added on, paperwork goes missing, and information turns inaccurate when a third-party collection agency takes over a delinquent payday loan debt.
Consequently, payday loan relief programs can result in a debt becoming legally uncollectible.
That means you don’t have to pay for it. And even better, legally uncollectible debt cannot legally remain on a person’s credit report.
What if my payday loan debt is proven valid?
If your payday loan is validated, an attorney will work with the collection agency to settle the debt for a significant amount less than the total balance owed.
Payday loan settlement is used as a last resort to pay off a past-due payday loan collection account.
Do payday loan consolidation companies work?
Golden Financial Services (GFS) is a national debt relief company, rated #1 by Trusted Company Reviews.
Our consumer credit counseling alternatives and debt relief services have helped thousands of Americans become debt-free faster and save money.
GFS has maintained an A+ rating by the Better Business Bureau going back since 2004. In addition, we have attorney-based debt resolution programs available to help resolve PayDay loans, credit cards, and unsecured debt.
Are you looking for payday loan consolidation? Make sure only to consider reputable and legitimate payday loan consolidation companies or debt relief programs.
Call today at (866) 376-9846 and learn payday loan relief programs.
Payday loan consolidation BBB Accredited
Are you interested in working with a payday loan consolidation BBB accredited company?
GFS feels it’s more important to consider a company’s letter rating (i.e., A-F) over whether or not a company is BBB accredited.
Rick Sorrentino, a Senior Debt Counselor at Golden Financial Services says, “When dealing with an accredited company always keep in mind that ‘becoming BBB accredited’ could be paid for whereas a company with an A+ rating–that isn’t accredited–you know they earned that A+ BBB rating.”
Let’s take a closer look.
The BBB letter rating for payday loan relief companies is based on:
- time in business
- the number of complaints against a company
- the nature of complaints against a company
- timeliness in responding to complaints and whether or not BBB complaints get resolved in a satisfactory manner
- if a company is licensed in its industry and complies with federal and state laws
How do payday loan relief companies become BBB Accredited?
BBB accreditation is based on payment. Companies must pay a fee to become accredited.
However, companies must also meet certain criteria to become eligible for accreditation. Those criteria are similar to what the BBB bases a company’s letter rating on.
Therefore, a company’s letter rating is a more reliable factor to consider when looking for reputable payday loan consolidation companies at the BBB. Look for companies with a BBB rating of “A” or better.
To learn more about BBB accredited debt settlement companies, visit this page next.
Payday Loan Help From a #1 Rated National Debt Relief Company.
You don’t have to continue borrowing money with payday loans to keep your head above water.
Instead, cut your debt down to an affordable amount so that you can quickly pay off your bills.
How Payday Loan Consolidation Works
Payday loan consolidation programs either:
(A) reduce the interest rate
(B) negotiate a lower payoff for the entire debt, or
(C) challenge the debt’s validity.
Let’s reiterate and summarize your options:
Through GFS, the debt resolution program disputes each payday loan debt. Creditors are then forced to prove the debt is valid.
If invalidated (i.e., proven to be invalid), the debt becomes legally uncollectible. A legally uncollectible debt is one that you don’t have to pay.
How To Get Help With Your Payday Loans
You can consolidate payday loans, credit cards, and other unsecured debt through GFS debt relief plans. Consumers must owe above $5,000 in total debt to qualify. Start with a free consultation by calling (866) 376-9846 today.
How payday loan relief works
Debt settlement programs illustrate to your creditors that you don’t have the funds to pay and you’re experiencing financial hardship. The only other option you will have is to file for bankruptcy, in which case they may not get paid anything.
Why do payday loan lenders sell the debt to a third-party collection agency?
In addition, payday loan lenders will eventually give up trying to collect on payday loan debt. They will write the payday loan off as “uncollectible,” getting reimbursed through tax credits.
For example, if you borrowed $20,000 in payday loans and then defaulted on your monthly payments, the payday loan company would write the entire debt off and get reimbursed through tax credits. This tax reimbursement is as good as cash for a business.
A third-party collection agency then buys the delinquent payday loan, resulting in additional profits for the payday lender.
This new collection agency then attempts to collect money from the borrower. At this point, debt validation disputes go out. These disputes contain over 30 pages of clauses requesting proof that the debt is valid.
Collection agencies that buy delinquent payday loans often get sent the consumer’s basic information on a spreadsheet. The collection agencies don’t sit down with the payday loan lenders ensuring accurate and complete information gets transferred at the time of sale.
Consequently, information turns inaccurate. Paperwork goes missing. Unauthorized collection costs and fees get added.
Join the millions of consumers that are debt-free through GFS
The debt collection and payday loan industries are motivated by greed and profit. Thankfully, consumer protection and federal laws exist allowing consumers to have a path to go down to fight payday loans.
GFS programs offer consumers an affordable way to fight payday loan debt, consolidate all debts into one, and become debt-free quickly. Paul Paquin, the CEO of GFS says, “Over the last eighteen years we’ve continued to offer the most innovative and effective debt relief programs on the market, helping millions of consumers get out of debt.”
Debt Relief Services include:
- Credit Card Debt Consolidation
- Debt Settlement
- Debt Relief
- Debt Management
- Student Loan Relief
- Bankruptcy Alternatives
- Debt Validation Program
- Free Credit Repair Options
- Free Financial Education and Debt Relief Blog
Can I consolidate payday loans with bad credit?
You don’t want to attempt to get a loan with bad credit. Consolidation alternatives, however, including debt resolution, debt validation, and settlement programs, could be your perfect solution. If you get approved for a consolidation loan with bad credit you’ll likely have to pay high-interest rates and fees. The idea is to consolidate your payday loan into a more affordable loan, not get yourself deeper in debt.
Do debt relief programs have a negative effect on credit scores?
All debt relief programs can result in credit scores going down because you have to fall behind on monthly payments for the program to work effectively.
Therefore, only use a debt relief company that explains the program’s pros and cons. Payday loan relief and settlement companies should be transparent about the program’s downsides. The best debt relief companies will assist clients with credit repair and through financial education.
Reputable payday loan relief programs that help with credit
Reputable payday loan relief programs help their clients develop a full financial recovery plan. This plan helps clients go from bad credit and high debt to becoming debt-free and rebuilding their credit.
You may also be interested in reading 24 ways to build excellent credit fast.
Should I get a payday loan?
Avoid payday loans! Instead, consider debt resolution if you’re struggling to pay off high bills.
You’d be better off getting a consolidated loan through a local credit union or bank over a payday loan.
Do it yourself payday loan consolidation.
If you have a high credit score, visit your local credit union and apply for a debt consolidation loan. Payday loans can be consolidated with any other high-interest debt through a bank loan. After you get the loan, use it to pay off all of your high-interest accounts, including the payday loans.
Check out the following article, “What you need to know about payday loan lending.”
Source: Experian, Payday Loan Consolidation