Welcome to Dollar Stretcher Community Sign in | Join | Help
in Search

The Dollar Stretcher Community has a new home!

Feel free to read the great frugal living tips, ideas and discussions readers and community members have posted here. But if you'd like to post something or start a discussion, please click here to go over to our new community site and create an account.

Please contact Brandy@stretcher.com for questions about these forums.



Repaying Pay Day Loans

Last post Tue, Jan 28 2014 8:59 PM by Anna Marie. 21 replies.
Page 1 of 3 (22 items) 1 2 3 Next >
Sort Posts: Previous Next
  • Tue, Jan 11 2011 4:03 PM

    • Brandy
    • Top 10 Contributor
    • Joined on Wed, Mar 28 2007
    • Saving in South Mississippi
    • Posts 25,145

    Repaying Pay Day Loans

    Payday loans can be a real nightmare. Can you help our reader, J. to find solutions and answers?

     

     How can I get out of debt with online payday loans? What will happen if I'm late with payments? Is it the same for regular payday loans?
    J.

    The Dollar Stretcher Community Manager



  • Tue, Jan 11 2011 5:43 PM In reply to

    Re: Repaying Pay Day Loans

     As with any debt, pay them on time and if at ALL possible, pay more than the minimum to avoid paying so much interest.

    And no matter what, do not get a second loan to pay off an existing loan.  You're just compounding the problem.

    I read the blog of a woman who went so far as to live in her car for a while to get out of debt.  Sometimes extreme measures are called for.
    Find ways to cut expenses AND earn more money.

    If you haven't canceled internet and cable service yet, now is probably the time.  If you're taking payday loans you're beyond your means and/or in an emergency situation. 

    Here are some things that have worked for other people in debt:

    Rent out a room, get out of your lease or otherwise cut back on housing expenses.  Never buy beverages (coffee, soda, water, etc). Drink tap water.  Never go to a restaurant to eat. Cook at home and bring some water and lunch with you when you're out.  Drive only to and from work and if you have other errands, like the food bank or the grocery store, do them on foot or on the way to/from work. If you live less than 2 miles from work, sell your car and walk.  If you owe on your car, try to cut a deal with the dealer to take it back from you.

    Find things to sell on craigslist.  Pots, pans, clothes, furniture, jewelry.  

    Turn down the heat and wear more clothes.  

    Find other ways to earn money.  Lawn care, dog walking, around here people pick up dog poo in yards for about 15$/hour.  Clean houses in the evenings.  Do post-party clean up.  A cousin of mine does clean up after fires and is making good money at it. It's hard work but no one else wants to do it.

     Talk to the folks you owe money to and set up a payment plan.  If they won't do that, try consumer credit counseling.

  • Wed, Feb 8 2012 1:29 AM In reply to

    Re: Repaying Pay Day Loans

    Interesting discussion. I hope I can you with these a bit of information. I tried before these online. We all know Payday loans are good for emergencies such as paying bills or for those who have a crisis you cannot pay for a personal loan is there to help for us. What I tried was short term loan, after they approved my application I easily get my money. Due dates for instant payday loans are usually upon your next payroll deposit, but some lenders can extend that up to 45 days from the time of your loan. Installment options are also available in many cases.  Its easy and reliably fast.

  • Wed, Feb 8 2012 8:46 AM In reply to

    • Brandy
    • Top 10 Contributor
    • Joined on Wed, Mar 28 2007
    • Saving in South Mississippi
    • Posts 25,145

    Re: Repaying Pay Day Loans

    ericksimpson:
    We all know Payday loans are good for emergencies such as paying bills

    No, we do not all know or believe this. Most of us here believe Payday loans are a terrible financial decision to make. They are costly and do no favors for a person's credit.

    Far better to live as frugally as possible so you can build up an emergency fund to use when an emergency happens.

    The Dollar Stretcher Community Manager



  • Wed, Feb 8 2012 1:09 PM In reply to

    • grame
    • Top 50 Contributor
      Female
    • Joined on Tue, Feb 22 2011
    • Kingdom of Callaway
    • Posts 1,950

    Re: Repaying Pay Day Loans

    Brandy:
    No, we do not know all believe this. Most of us here believe Payday loans are a terrible financial decision to make.
     

    Brandy is absolutly correct.  They are not payday loans, they are preditory loans.  These businesses prey on the uninformed and desperate.  If someone is considering this, call a service organization that may be able to help or will make a referral to someone else.  Many RSVP volunteers (via a senior center) have retired financial folks that may be able help work out a budget). I thought loansharking was illegal, so I don't understand why these places are allowed.

    My only dealings with these places is through my job.  We have wards that saw this as a way to get easy, quick cash and don't understand the costs.  After our ward is finally contacted after a few missed payments, and told that I pay their bills, the fun begins.  I love it!  I get to go into fll HBIC mode and I always win.

    I declare to you that woman must not depend upon the protection of man, but must be taught to protect herself, and there I take my stand. ~Susan B. Anthony
  • Wed, Feb 8 2012 1:43 PM In reply to

    Re: Repaying Pay Day Loans

    Brandy:

    ericksimpson:
    We all know Payday loans are good for emergencies such as paying bills

    No, we do not know all believe this. Most of us here believe Payday loans are a terrible financial decision to make. They are costly and do no favors for a person's credit.

    Far better to live as frugally as possible so you can build up an emergency fund to use when an emergency happens.

     

    I would never recommend Payday loans to anyone - as grame said, the rates and fee structure are predatory.  Here are some highlights from the Consumers Union Fact Sheet on Payday Loans (Note:  this article was primarily about pending legislation in California, thus the statement in #3):

    1. Payday loans become a trap and are not used on a one-time basis as originally claimed by the industry.

    <snip>

    2. Payday loan rates are way too high, especially given their low risk.

    The industry claims its extremely high fees are necessary on account of the risk being taken and its high loss ratio. In fact, in Colorado, one of the few places in the country that collects actual data from the industry, payday lenders charge-off only 3% of the loans made from 1996-1997, while their loans had an average APR of 485.26%.(5) Conversely, California banks charged off 2.7% of credit card debt in those same years, while having an APR of 15 - 22%.(6) Thus, the payday loan industry's claim of risk and loss simply does not stand up to close scrutiny and do not justify the high rates charged. Therefore, there is plenty of room for rates to decrease, as called for by SB 834.

    <snip>

    3. Payday lenders are virtually unregulated in California.

    <snip>

    4. Consumers are easily deceived by payday loans.

    This transaction is inherently deceptive. By requiring consumers to turn over a post-dated check, consumers are often coerced or harassed by illegal threats or collection practices. For example, they will be threatened with jail for passing a bad check, even though the law specifically says they cannot be prosecuted if the check bounces. Payday lenders often deposit a check before the agreed-upon date, causing the check to bounce and imposing more fees on consumers.

    From the same article:

    ALTERNATIVES TO PAYDAY LOANS

    Payday lenders are not the only alternative for consumers facing debt problems. After all, they were legalized in California two years ago. Consumers obviously managed to deal with their debt for decades before anyone had heard of payday loans.

    1. Negotiate a payment plan with creditors.

    <snip>

    2. Credit cards/Secured credit cards.

    <snip>

    3. Advances from employers.

    <snip>

    4. Credit unions.

    <snip>

    5. Overdraft protection.

    <snip>

    6. Lines of credit from finance lenders. 

     

  • Wed, Feb 8 2012 5:35 PM In reply to

    • Walt34
    • Top 75 Contributor
    • Joined on Mon, Dec 17 2007
    • WV eastern panhandle
    • Posts 1,406

    Re: Repaying Pay Day Loans

    ericksimpson:
    We all know Payday loans are good for emergencies such as paying bills or for those who have a crisis you cannot pay for a personal loan is there to help for us.

    I dislike "piling on" but I'm in complete agreement with the others on payday loans. Understand that I've been in the position of eating one hot dog for dinner instead of two to make the package last until the end of the week, but it has never occurred to me to take out a payday loan. That's a treadmill I never got on.

    They are a BAD DEAL, much worse than credit card debt.

    Officially Recognized Stretchpert in Money Management
  • Wed, Feb 8 2012 8:26 PM In reply to

    Re: Repaying Pay Day Loans

    In our state we voted to out-law the payday loan and title loan places.  They have been out of business for over a year now.  The local pawn shops are seeing a bit more business, but they figure people are really selling things, as so few of them ever pay the fees to get things out of "pawn". 

    Some of those places were charging over 300% interest, since they were just "monthly" loans on a car title.  Every month the loan had to be re-written if it couldn't be paid off.  So many were going without paychecks since they had already promised the check to the loan place.  It certainly hasn't been the end of the world, and former customers are even stating that they were caught in the never ending circle of debt and are now glad the places are out of business. 

  • Wed, Feb 8 2012 9:05 PM In reply to

    Re: Repaying Pay Day Loans

    Brandy:

    ericksimpson:
    We all know Payday loans are good for emergencies such as paying bills

    No, we do not know all believe this. Most of us here believe Payday loans are a terrible financial decision to make. They are costly and do no favors for a person's credit.

    Far better to live as frugally as possible so you can build up an emergency fund to use when an emergency happens.

     

    I never asked for a loan I slowly pay company bill paying back so never borrowed any money at all I do have saving but its in case emergancy fund money period I tried years ago but it is high interest and I agree with braindy.

     

    chrissanne
  • Sat, Feb 18 2012 3:35 AM In reply to

    • Katarina
    • Not Ranked
    • Joined on Sat, Feb 18 2012
    • Posts 3

    Re: Repaying Pay Day Loans

    Payday loan lenders are in the business of making cash. One group in Missouri called Standup Missouri is attempting to convince people that payday loan lenders only lend to the poor who cannot afford it. If that were true, lenders would not make any money. Payday loans are goods that can be used on occasion by individuals who can afford to pay it back, which means the middle class utilizes them. Get more information at: Payday loans

     It is very much important that we seek first information about the pros and cons of payday loan so that we will know on how we are going to manage our debts.

Page 1 of 3 (22 items) 1 2 3 Next >

The Dollar Stretcher has a new community!

Feel free to read the great frugal living tips, ideas and discussions readers and community members have posted here. But if you'd like to post something or start a discussion, please click here to go over to our new community site and create an account.

About Us    Privacy Policy    Writers' Guidelines     Sponsorship     Media    Contact Us



Powered by Community Server (Commercial Edition), by Telligent Systems