It’s bad enough getting into apayday loan in the first place. But even more fun is involved if you are unable to pay back your payday loan. Most companies keep piling up interest and late fees, making it tough to repay the loan. A reader recently wrote of her experience paying back a horrendous payday loandebt. It was very inspirational, a true example of being an assertive, informed consumer. She avoided all add-on late fees and was able to pay it off. It pays to read (and also not to do payday loans in the first place).
I got involved in a payday loan and it looked like I would never get out of it. Until then, I was going to continue to keep paying all these extra fees. I started reading the terms and conditions of the contract that I signed. It specifically said in the terms that if I defaulted on the loan, that it would go into arbitration after 60 days. Now if you pay on the loan bi-weekly, that means you have 4 paychecks to pay it off. Not just that but if you stopped paying on the loan, it is ILLEGAL for them to continue adding the ballooned interest unless you sign another contract agreeing to it.
With this knowledge, I STOPPED paying my loan. I then sent them a letter stating that I refused to pay their interest anymore since I was no longer able to keep up with it financially. I told them that I would be making payments to them every 2 weeks until the loan was paid. I also included a Cease and Desist clause in there since I was making a payment plan which was satisfactory to my situation. Then every week I made sure to send a payment in the form of a Cashier’s Check until it was paid. I never heard a word from them and the loan was paid in full without a single phone call. At the end I did receive a letter from them thanking me for paying the account in full and that was it. never paid a penny more in interest or anything.
So if anyone is stuck in a never ending student loan and wants an out to the nightmare, You can send them a letter using the information at the bottom of this post. Just make sure you look at and clearly understand the terms of your loan.
The magic letter:
At this time I also request that all communications Cease and Desist in regards to this debt. This is a notice that any phone calls from employees or registered agents of PLS to my place of employment, home phone, and references are to stop. My schedule makes it impossible to be available to receive phone calls during normal business hours. Be advised that any phone calls received in regards to this debt, will be recorded and by doing so after receiving this letter will be considered an acknowledgment of their agreement to being recorded.
Your cooperation is appreciated as I look forward to settling this debt as quickly as possible.
Do anyone else have payday loan experiences they want to share?
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one way to aviod this is to not borrow more than you can pay back in a short amount of time. i hate how everyone blames the payday lenders for this, when the inerest fees, and paydown options are, by law, explained to the customer before even receiving the loan. and the customer was ok with it then, but now that its time to pay it back, they want to complain?
Thank you so much for this information! I have been in quite the predicament for the past few months and I had no idea how to get them to quit calling me other than the wrong ways: i.e, debt consolidation, payday loans, etc. I’d hate to get into that mess. Thanks again!
The majority of people that use and enjoy the payday loan industry don’t think of it as hell. They think of it as a great option to get a shorterm loan right away when the need arises. For the few that do get caught in the cycle your information is very helpful. Thank you.
This is great information! It’s always good to know as much as possible about payday loans.
Payday loans are a great souloution for short term lending, if you are in a bind; and need money for groceries, gas, home, or auto repairs. Most locations are open later then banks. You can even get one in the privacy of your own home and get one online. They are cheaper than the overdraft fees at the banks. They are convenient and confidential.
Really – payday loans not hell?? 435% interest? Right. Hopefully they will be outlawed in this country soon.
i feel that payday loans are not a bad thing at all on the contrary, (if used poperly) are good. thaey help people avoid bank fees and late charges
435% interest is not that high, it sounds high but no one is actually pays interest for a whole year! to illustrate, a 417% interest rate is only 8 dollars per hundred per week. so a 200 dollar loan for two weeks will only cost you 32 dollars! thats way worth it! and do you realize that millions of people will loose their jobs if this industry goes out of business?
With the crisis of the economy taking off it is no wonder that more and more people are turning toward payday loans in order to get through from payday to payday.
Pay day Loans are illegal in some states. If you live in one of those states and they have given you a payday loan you can stop paying. They have no legal remedy as the loan was illegal in the first place.
However, the usefulness of such payday loans highly depends on the applicant needs. For a person in emergency who expect can payback in due date, such loans may help. The condition of loan lender is important too. Very high interests are a drawback, but some companies are more customer oriented and even accept bad credit persons.
I currently have 4 payday loans! and I dont know how to get out of them, aside from all my other bills, I dont have any more money, and I dont want to go get another loan. What can I do, and why dont they make it harder for people to get a payday loan. HELP!
My bro is in the same situation Lupe, I keep telling him to avoid it but in his situation, he does not really have any choice.