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10-22-2008 02:17 PM - edited 10-22-2008 04:00 PM
So, I've gotten myself into a sticky mess with some payday loans....you know, the loans that will tie you over until payday but in the meantime charge you obscene interest! Well, I'm in a rut. I have 3 of them! And the interest is hurting me--I can't pay off the whole thing because I'm paying interest on 3 of them at once...each payday!. I have other debt that is really affecting my credit score, but with paying these loans' interest I don't have the extra funds to start in on those. Help! Any advice is appreciated.
10-22-2008 02:47 PM
I feel your pain...I really do. It wasn't that long ago that I was in your situation. My personal belief is that payday loan sharks are the scum of the earth. I believe they are the root of predatory lending.
Back to your subject at hand. I'm sure you did sign some contracts agreeing to these terms. If there is any way at all you can start paying down the principle then do it. It may take some cutting back in your lifestyle. Cut in any areas you can. Beans rice and tunafish can keep you healthy! If you have cable, or anything that you can live without for a few months...cut it back.
Many people on this site will disagree with me on this point of view. If you have done everything that you can. (That means asking family for a loan, cutting back non essentials) I recommend default. You have to eat. You have to pay your rent or mortgage and you have to make a car payment if you have one. These are all things important to your health and your job. Not making any of these payments will put you in a worse spot than you are in.
If you do default on these loans, be prepared for a world of hurt and humiliation. Payday companies will call anyone they can to humilate you into paying your loans. (Your parents, family, work) Again, I don't recommend this option since you did sign a contract. On the other side I don't feel bad for these companies when they get stiffed because they build a certain amount of default protection into the 500% apr they charge you for a few 100 bucks.
I hope this helped. Do the best thing for yourself and your family. Make yourself a promise today that once you get out of this mess you will never get yourself back in. Keep your head high and in one year you will look back on this mess a stronger person!
10-22-2008 03:10 PM
I feel your pain. My advice....close your checking account and open a new one immediately. You need to pay your day to day bills more than you need to pay those sharks! If you close your checking acct immediately they won't be able to draw the payments. Once they realize your payments were returned they will start calling you like there is no tomorrow - when that happens CMRRR a cease and decist letter and ask that all communication be via US MAIL or Email (since most deal with email). Next step - contact them and ask them for a payment plan, but DO NOT GIVE THEM YOUR NEW CHECKING ACCT INFO - tell them you will only pay them with certifed funds like cashiers checks or western union.
I've been through this and I am still going through this - DH lost his job at the beginning of the year and we needed money to pay our bills and we got stuck in the same cycle as you. Only 1 of the loans actually went to collections so far, but I'm finding that all they want is there $ and now that we are doing better financially I am able to strike deals with them for less than the full amount owed as long as I give them a lump sum.
10-22-2008 03:23 PM
Many people on this site will disagree with me on this point of view. If you have done everything that you can. (That means asking family for a loan, cutting back non essentials) I recommend default. You have to eat. You have to pay your rent
I would also agree. People also will slame me but I would check Dave Ramsey on on this subject. He has delt with this issue and you may find some good advice from people who have been there and done that. take far of the basics first. Food, shelter,lights, transportation.
10-22-2008 03:48 PM
10-22-2008 03:53 PM
10-22-2008 07:05 PM
Been done this deserate road myself - it isn't fun.
I got to be kinda friends with one of the clerks and asked her if there was anyway around renewing every 2 weeks at that time, but monthly at the end. What she did for me was this - told me to go ahead and let my check go through, it cost an OD fee at the bank and of course they would add a fee. At that time it goes into their internal collections wherein as long as I paid whatever her and I agreed upon every two weeks it would stay below their collection requirements radar and I paid it off as was and saved that interest. Of course I was at the max (lod) and it would take 6-8 weeks to do this, but it saved my life.
Plus, being kinda friends, she knew I had another one and once that one was paid, the greedy company (not my friend) was more than willing to reloan me money. So we did it again, the same way and I was able to pay off the other one while controlling the interest.
We're still friends outside the loan company today. Might pay to become a little friendly and share your situation and see what might get offered. It saved my bacon!!
10-22-2008 07:39 PM
Here's my take on this, and this is strictly my take as I, at one point, had 5 or 6 at the same time. If they are store fronts (meaning you actually walked into a store and signed papers) let them default, then call for a payment arrangement.
If they are all via the internet and I hope they are, depending on what state you live in, you are not liable for ANYTHING. Let me explain. MOST internet PDL's are illegal, unlicensed companies. If they are not licensed, they have NO authority to loan, never mind collect. Most state laws require that the business be licensed in the state in which you live. Pennsylvania for example states that for internet lending, the lending company must be licensed somewhere in the US. NJ and NY for example PROHIBIT them period, meaning no one can lend to these residents, licensed or not.
I warn you though, if these are internet PDL's, once you default, they will call you, they will call your work at some point and they will threaten you with fraud and arrest. This also is obviously illegal and a scare tatic the collection companies use. They will want you to pay and pay within the hour. I have one pay day loan company, located in the UK (which I just found out about) that still calls me this day after 2 years or so. I paid them back there $200 (they claim it was interest fees, I say screw you, it's what you lent me).
If you want to, post the company names and your state and I will help you further.