In our country, Texas is known to be the “Wild West” of predatory lending. It is one of the states that allows high-interest payday loans.
The loan sharks in Texas offer fast cash to the people who desperately need the money and that too without a credit check! In return, they charge an incessantly high-interest rate and finance charges. In Texas, the average interest rate of payday loans is around 662%!
Besides, the absence of any state regulations for payday loans (pdls) has become an added advantage for them! As a result, the payday lending business in Texas is skyrocketing!
You would notice many new stores of payday lenders are popping up in various cities across the state!
Eventually, many people are falling prey to the lucrative fast cash offers by the payday lenders. And at the end of the day, these people are getting debt trapped!
Here are some of the common major problems that Texas people are facing about payday loans. And based on that, we have tried to provide the best possible solutions to their problems.
Scenario 1:
Hi! This is Tom from Dallas, Texas. I am stuck with my 4 payday loans worth $5,500. So, I am planning to opt for a payday loan debt consolidation program to get out of this debt cycle!
But will a payday loan consolidation program hurt my credit score? I am really worried about that. Please help!
Solution:
Hey Tom!
Congratulations! You have taken the right step to get rid of your payday loan debt trap!
Opting for a payday loan debt consolidation doesn’t affect your credit score adversely. Rather, it can help you to improve your credit score!
Because falling behind your payments for your pdls can make your lenders sell off your account to a collection agency. And these collection agencies often report delinquencies to the credit bureaus. Eventually, your credit score can reduce!
Besides, if the lenders or collectors sue you in court for nonpayment and win the judgment against you, it can affect your credit score and show up in your credit report for up to 7 years!
But with a payday loan debt consolidation program, you can pay off your 4 pdls by a single payment every month! And that too with reduced APRs and waived off late fees or penalties!
So, your debts won’t go for collections. Moreover, as you are making payments for your pdls, the lenders or collectors can’t sue you too!
In short, your credit score won’t be affected by opting for a payday loan debt consolidation program.
Check out this payday loan consolidation calculator to find how much you can save by consolidating your pdls.
Scenario 2:
My name is John and I stay in San Antonio, Texas. I have 3 payday loans from Cash Store, Ace Cash, and Speedy Cash. The total outstanding payable amount is about $3,500.
I have been making payments for my payday loans. But I am unable to make payments anymore due to financial hardship in my family. I want to settle my payday loans to a lower amount and get out of this debt mess completely! Can you please help me in settling my payday loans?
Solution:
Hi John!
Well, if you want to settle your payday loans, you can negotiate with your lenders. But if you don’t want to take up the headache of negotiating with your lenders, you can opt for a payday loan debt settlement program!
For that, you need to approach a genuine debt settlement company. The expert financial coaches of the company will negotiate with your lenders to reduce your outstanding payable amount. Besides, they will try to negotiate with your lenders to eliminate any additional interests or charges.
Based on that, the debt settlement company will chalk out an affordable single monthly payment plan. Also, the company will set up a trust account where your monthly payments will be deposited till the settlement amount is accumulated to pay off your pdls.
Scenario 3:
I am Logan from Houston, Texas. For the past 2 years, I have been making payments for my payday loans from Advance America and EZ Loan.
But it’s not yet paid off. Still, I owe about $2,000 as the total interest for my 2 payday loans. I need help to pay off my payday loans!
Solution:
Hey Logan! Don’t worry! As far as I know, EZ Loan is not a legal payday lender in Texas. So, you don’t need to make any interest payments. Just pay off the principal amount and you aren’t legally obligated to pay any interest!
Check these 5 easy steps to get out of illegal payday loans to find more information!
I hope it will reduce the debt burden a lot because now, you need to focus on a single payday loan debt only!
You can request your lender for an Extended Payment Plan (EPP) so that you can repay your pdls over a longer period and without any additional interests or charges!
I hope it will help you to get rid of your payday loan with ease and curb financial anxiety!
Scenario 4:
Hi! My name is William and I am a resident of Plano, Texas. I have taken out 2 payday loans from Check `n Go and Sun Loan Company. Currently, the outstanding payable amount is $2,150.
But I am unable to pay off these pdls as I have got a pay cut recently. And I don’t know when the situation will improve.
I am just left with $110 in my checking account. Every day, the lenders are attempting to withdraw funds from my account. And $30 is getting deducted from my account due to NSF. I have come to know from the internet sources that many people get arrested for not repaying their pdls! Can I go to jail for unpaid payday loans?
Solution:
Hi William!
Most likely, you have started receiving collection calls from your lenders. If they can’t withdraw funds from your account, either the lenders will sue you or they will sell off your account to a collection agency.
And let me tell you, the collection agencies can also sue you and unlike the payday lenders, they will report delinquency to the credit bureaus as well!
So, you can’t be arrested for nonpayment of your payday loans. However, if you are sued and you don’t show up in court, the judgment can go against you. And the court can also issue a warrant for arresting you!
So, if you are unable to make payments, it’s better to negotiate with your lenders to settle your payday loans on your own.
Scenario 5:
Hello! I am Robert from Odessa, Texas. I have 4 payday loans with very high APRs ranging from about 410% to 530%. Till now, I haven’t defaulted on my payments!
But I think that I will default on my payday loans soon as I have got some credit card debts to pay off! So, can I stop payment on a payday loan check? Will it help me to repay my payday loans?
Solution:
Hey Robert!
Yes, you can stop paying for your payday loans! Most likely, you have provided ACH authorization as a part of your loan agreement!
So, you can stop your lenders from debiting your account by revoking the ACH authorization. You need to inform your lenders that you are revoking authorization. And send a copy to your bank as well! Your bank may take 3 working days to process your request.
If you don’t have time to notify the bank to stop withdrawal, you can close your account too!
However, stopping payments for your payday loans won’t reduce your debt burden. You will still owe your payday loans.
In your case, the best way to get rid of your payday loans would be opting for a personal loan to consolidate your high-interest payday loans. By doing so, you can save money on your interest payments as personal loans usually have much lower interest rates than payday loans. And you can repay your new loan over a longer period!
But remember, you need to have a decent credit score for taking out a personal loan at a preferable interest rate!