Payday loan relief is a common concern of those considering bankruptcy. And it should be. Payday loans are some of the most predatory loans out there. Payday loans provide quick cash. They are easy to get. But they come at a cost. A big cost. Typically payday loans charge nearly 500% interest. That is a lot even for the lending industry. As this Chicago Tribune story points out, payday lenders are taking some heat.
The way payday loans work is you post-date a check and exchange that for a quick cash loan. Lenders such as Check ‘n Go, Check Into Cash and others offer easy money for those in need. Repaying these loans is not as easy. If the post-dated check is not honored, the extreme interest rates kick in. And this is on top of the loan processing costs and fees. So if your $350 check to the payday lender offered in exchange for a $300 loan cannot be cashed when promised, watch out. No wonder so many are in need of payday loan relief.
Part of the problem, too, is the aggressive nature of the lenders. Many borrowers look to payday loan options because their credit is bad. Payday lenders are their only options. And the payday loan industry knows this. That is why they charge what they do. They can. That is little solace to borrowers who fall behind on these loans. And it is when the need for payday loan relief really shows itself.
Payday lenders charge enormous intest and excessive fees. And if you don’t pay them you need another loan to pay off the last. It becomes a cycle. For those in it, a vicious cycle. If borrowers don’t pay, payday lenders can tap the borrowers’ bank accounts. To get these loans you must provide your bank account information. All of it. And with that, payday lenders can essentially take from your account what you owe. Not good, especially if you did not know it was coming. Another reason borrowers often need payday loan relief is the aggressive nature of payday lenders. If you don’t pay the loans back, don’t expect to be ignored.
Bankruptcy is an option for payday loan relief. And it is a good option. Payday loans are unsecured debts that are commonly discharged, or eliminated, in bankruptcy. If you owe for a payday loan, you may eliminate it by filing bankruptcy.