Payday loans are easy to take out and harder to get rid of. Often when the debt burdens run high, consumers try to get rid off their payday loans desperately. As a result, they may end up with scam services and suffer further financial losses. If you’re trying to get out of your payday loans with professional assistance, choose your settlement company wisely.
Which 3 steps are to be followed before enrollment?
When you're thinking of how to get out of a payday loan cycle and getting payday loan help from a professional company, you should know the 3 steps mentioned below before you get enrolled.
- Make a list of your payday loans: Calculate your total payday loan debt by putting down all the loans you've taken so far. Include the names of the lenders, the amount borrowed from each lender, the total amount paid to each lender, the interest, and the late fees.
- Check out your state payday loan laws: While some states prohibit payday lending, some authorize it. So first you have to know the payday loan laws of your state and moreover if your lender is following the rules.
- Check the license of your lender: Check out whether or not your lender is licensed to do business in your state. If he doesn't, then you are not required to pay the interest and other fees. Only paying the principal will do the needful.
Payday loan debt settlement - The Do's & Don'ts
Letter to revoke ACH debit authorization: If you want to stop a lender from debiting your bank accounts, send a “Letter to revoke ACH debit authorization” to each of your payday lenders. You can also revoke any wage assignment agreement you may have signed and give a copy to your payroll department. But continue to pay your loans as long as you can.
Closing your checking account: Don't try to close your checking account in order to force your payday lender to settle. There are other obvious ways to keep lenders away from debiting your accounts. Stopping payments on your loans in order to force a settlement increases your chances of being sued for breach of the loan arrangement.
How to evaluate the credibility of your payday loan settlement company?
Check out the 7 legitimate tips to choose a trustworthy payday loan settlement company.
- Know the fee structure: You should first check out the fee structure of the company. As per the FTC Telemarketing Sales Rule, a settlement company can never demand advance fee, and is required to charge fees in proportion to the settled amount.
- Look for affiliations: Check out if the firm is associated with organizations like The Association of Settlement Companies (TASC) or the Better Business Bureau (BBB). Moreover, check out if the company is a member of the US Chamber of Commerce.
- Check for certifications: Check out if the debt negotiators of the company are IAPDA certified debt arbitrators. A debt negotiator can only get IAPDA certification if he has good command over the debt settlement laws.
- Find out the achievements of the firm: Make sure you're getting enrolled with a settlement company that has a good market reputation and success rate. Check out the official website of the company to gather as much information as you can. Visit the client reviews section and see what people are saying about them.
- See if they explain their program: Before being enrolled into their program, you should be fully aware of the procedure of the settlement program. The representative of the payday loan settlement company should tell you the entire debt settlement procedure in details before the commencement of the program.
- See if they offer money back guarantee due to dissatisfaction: Check out if the company has any "money back policy" if you at anytime become dissatisfied with their services.
- See if they have any client area for case reporting: Know if the firm offers any secure client area so that you can check recent activity and progress of your case, settlement offers made and received from creditors, e-copy of your power of attorney, balance in your trust account, etc.
A payday loan settlement program can help you shed off all your payday loans if it's structured and executed properly. To get out of this vicious cycle, payday loan debt settlement is the best possible option so far. Though there are chances of ruining your credit score to some extent if you get into a payday loan settlement, it's much better than getting sued or filing for bankruptcy.