If you've racked up payday loan debt and you're unable to meet the monthly payments, you may negotiate a settlement with the pdl lenders. Payday loan debt settlement enables you to get rid of your dues by allowing you to pay less than the balance you owe. With settlement, you can get out of the payday loan trap and avoid further harassment by pdl lenders and collection agencies.
How payday loan debt settlement works
You can co-ordinate with pdl lenders or collection agencies and settle your bills on your own. Make sure you know how much you owe in total. Just check your credit report to find out which bills are unpaid and whether the accounts are well past the Statute Of Limitations (SOL) period. Know how to settle your debts yourself.
In case you don't feel comfortable negotiating with lenders/CAs, you may take advantage of settlement services. Such services enroll you in a settlement program which requires you to stop paying your pdl companies so that you can save a certain amount each month. When you've accumulated enough cash for several months, the negotiator at the settlement company communicates with the lenders or CAs (whoever holds your accounts) so that they agree to accept an amount less than what you owe. Find the details on how debt settlement works and know about the pros and cons before you enroll in it.
Benefits of payday loan settlements
When you settle your pdls, you get the 3 benefits, as given below.
Steps to take before going for payday loan debt settlement
You should take the following steps before getting enrolled into a payday loan debt settlement program:
Once you close your checking account, your lender may file a lawsuit against you for violating the terms and conditions of the contract. This may in turn cost you a lot of money. You'll have to spend a hefty amount for paying the attorney fees and other court-related fees.
How to select a trustworthy payday loan settlement company
You can use the following tips to select a trustworthy payday loan debt settlement company:
Apart from the above mentioned points, you should check whether the company follows the new settlement laws enacted by Federal Trade Commission. For instance, under the new laws, the settlement company can't charge fee prior to settling at least one account of the consumer. They can't also make false claims about their services. You should work with the settlement company that follows all the rules and regulations.
3 Signs to help you detect payday loan debt settlement scam
The following signs can help you detect a payday loan debt settlement scam if the company:
In spite of the fact that settlement helps consumers reduce their debt burden, there aren't many companies offering payday loan settlements. This is because the interest rates on pdls are so high and the fees add up so quickly that it gets difficult to negotiate and reduce the balance to an amount that the consumer can afford to pay. So, most debt relief companies offer payday loan consolidation programs instead of settlement. Payday loan consolidation doesn't help to reduce the principal debt balance but it lets you obtain low rates of interest on your pdls. Moreover, the consolidator negotiates with your pdl lenders to cut down or eliminate late payment fees incurred on your accounts. The best thing about pdl consolidation is that you can clear your bills with a single monthly payment instead of making several payments each month.