If you’ve ever thought a payday loan seemed like a convenient way to get money fast, you aren’t alone. These loans are marketed as simple and effective, and are enough to tempt anyone who is strapped for cash.
After all, what can go wrong?
You borrow a chunk of money for a few days or weeks, and pay it back once you receive your next paycheck. Easy, right?
Unfortunately, these loans are not as simple as they seem. They are designed to seem helpful, but are actually downright predatory. Their terms are exorbitant and borrowers are set up to fail – and owe far more than they borrowed.
Rates
Payday loans are designed to be short term loans. You can borrow a few hundred dollars for just a “small fee,” but this fee can actually equate to a rate of 1000% or 2000% – something you’d never find from a reputable lender.
Not to mention these are the rates you pay if you manage to pay your loan on time – which occurs less often than you might think. Unpaid loans get rolled into new loans that also include interest on top of the original principal. The lender is than able to charge higher rates the next period.
Your unpaid loan increases at a dizzying rate.
Aggressive Collections
In addition to charging high rates, payday lenders also tend to use aggressive tactics when it comes to collecting on the money they’ve owed you. They know you’re at their mercy and they’ll do whatever it takes to get the money you owe them.
The problems with payday loans have become so bad, lawmakers have stepped in to protect consumers. To check out what’s being done to get payday lending under control, check out this articles from NPR.
Dealing with Payday Loan Debt
If you can, avoid payday loans. They’ll cause you more trouble than they’re worth.
However, if you’ve already taken the leap into a payday loan, understand that you have options. Bankruptcy can help you deal with payday loans because it eliminates unsecured debts – which payday loans are.
It’s important if you have payday loans and you’re considering bankruptcy to work with an experienced attorney. Filing for bankruptcy might seem simple, but the process puts your assets at risk. And considering the lengths to which a payday lender will go to collect his or her debt, you need an experts on your side helping you to protect those assets.
Have you gotten in too deep with payday loans? Are you tired of dealing with the endless calls and other harassment from payday lenders? Or are you worried you’ll never be able to afford to pay back a loan because the payments you’re making are doing nothing to reduce the debt?
We can help.
To learn more about the risks of payday loans or to begin the process that could save you from aggressive payday lenders, contact the law office of Frank J. LaPerch, PC at 845.942.5500.
