Many a times, people take out payday loans without having any idea about the state rules and regulations. If you're one of them, then check out the payday loan laws in your state as soon as possible. Once you check out the laws, you'll come to know that all the lenders are not legal in your state.
Take for instance, you've obtained payday loans from the companies like VIP Loan Shop, White Hills Cash, Blue Thread Lending and Zip 19. None of these lenders are legal in this state. As such, you've to payback the principal amount only. In addition to that, you'll have to take a couple of other steps as well. Read along to know about them.
3 Steps you need to take to get out of the debt trap
Here are the 3 steps you can take when you wish to get out of payday loan debt trap.
Have a talk with the banker: Discuss with the bank relationship manager about the steps to close the bank account. Now, you may face some problems in closing the bank account under the following circumstances:
- Your paycheck is directly deposited into your bank account
- The bank does not want to close the bank account
In these cases, you may request the bank to put the account into deposit only status. Just inform the banker that your account has been compromised and you wish to revoke the ACH authorization. There is no need to tell about the payday loans in details. All you need to inform is that the lenders are withdrawing more than they ought to.
Ask your employer to issues paper check till you're able to move it to a new account. Even if you don't close the old account, make sure there is no link between these 2 accounts.
2. Pay back the principal amount: As per the state and federal laws, you're not legally obligated to pay interests and fees to the illegal lenders. You just need to pay back the principal amount to the lenders. Send the original amount to the lender and inform him that you won't make further payments.
Send a mail or a letter to the lender as soon as possible. Inform him that you've discovered the fact that the loan is not legal in your state for the following reasons:
- The lender doesn't have any license in the state
- The lender is not following the state laws
- Payday loan business is prohibited in your state
- The lender is charging a very high interest rate
3.Have patience and work with the bank: You may have some troubles with your bank. Have patience and cooperate with the bank managers. You may face some problems initially. Try to solve them before you receive your next paycheck.
Finally, calculate the exact figure you've paid till date. If you've paid more than the original amount, then ask lenders to give you a refund. You can get the contact details of lenders from their official websites. Send a mail to these lenders and ask for a refund.
Don't just sit back at home after closing the bank account. Find out the status of your old account on your bank's website. This will help you know if the bank account has been closed permanently.