Payday loans provide immediate access to funds for those who have cash emergencies. As an alternative to borrowing from a friend or retirement fund, many people look to these convenient services to gain access to emergency funding. The programs allow the person to take out a short-term loan at a high interest rate and repay the loan in several installments. The payments are drafted immediately from the person’s account on the day the person is paid.
Although this is intended to be a short term solution, a person can easily land in a payday trap where he or she is unable to completely pay off the loan. Many critics of this form of lending consider it predatory and discriminatory in nature. These loans are often marketed to low income households or people in vulnerable financial situations. The people will have a difficult time paying back the loan because of the high interest and limited income. Twenty-five percent of payday loans are made to people on social security. It’s not the loan itself critics are concerned about; it’s the interest rate. Lenders can charge over 100 percent or more for these loans. This makes this type of loan one of the most expensive loans available to consumers.
Recently, a bill was introduced to address the payday loan, which is considered a form of predatory lending. The bill would cap the rate a lender can charge for payday and other short-term loans. If the “Protecting Consumers from Unreasonable Credit Rates Act” passes, lenders will no longer be able to charge more than 36 percent for these loans.
Avoiding the payday loan problem is difficult for some people. People who have encountered financial challenges due to a layoff or unexpected expenses may have limited savings available to cover financial emergencies. Turning to the payday loan is often the only option many people have. Most people can get out of this dangerous cycle with the right support.
A debt consolidation program can help a person organize their debts and pay them off. In addition to consolidating the individual’s debts, the person can receive personalized coaching to help them learn better money management and planning habits. The coach works one on one with each individual to help them realize their financial goals. People who successfully complete the debt consolidation program and take advantage of the personal finance counseling available will be able to create a brighter financial future for themselves and their families.
Under informed or overwhelmed consumers may receive a letter that appears to be perfectly legal and official from what appears to be a reputable firm, only to later find out that the collection attempt was a scam. Knowing what to look for in a debt collection letter and how to verify the credibility of an agency goes a long way when it comes to avoiding being scammed.
People who receive these collection letters are often unsure about whether or not these letters are authentic. Here are some things a person can look for to determine whether or not the letter is an official notification
- An official website link listed
- Agency address information should be provided
- An official recording should be left at the number provided
When in doubt, it’s always better to do some legwork and research the debt. Many Americans pay off debts solicited by unscrupulous entities that present themselves as official debt collectors. You can verify whether or not the debt is from an official collector by researching the number provided using search engines.
The Attorney General’s office is another tool to verify the credibility of the debt collection agency; licensing information on each company is also tracked on this website. This resource will provide information on scams, complaints and feedback from others who have interacted with the company. Sending a letter to the agency to request confirmation on the debt is another step a person can take. The agency has thirty days to respond to a request to verify the debt owed to the agency.
Before an account goes into collection, the person should look into online debt consolidation as an option to stop collection calls. The online debt consolidation program counselors work with consumers to help them become debt-free. The counselors leverage their relationships with creditors to work with the consumers to help them verify, structure and resolve their debts. When an experienced debt counselor works with the creditor on the consumer’s behalf, the person is better able to organize their personal finances before the person gets too behind on their debts.
Are you tired of making numerous credit card payments each month and failing to make progress on your debt reduction plans? Credit card debt consolidation might be the right choice for you. Debt consolidation companies offer numerous benefits to their clients, including interest and fee reductions and lower monthly payments.
- Skilled Credit Counselors
- One Monthly Payment
- Lower Monthly Bills
- Fast Debt Reduction
- Credit Counselors
Many individuals are not taught how to effectively manage their money while they are in school. The typical advice revolves around going to college and getting a good paying job. That advice doesn’t teach people how to control their expenses in relation to their income.
Credit card debt consolidation companies offer skilled credit counselors that can help you create effective budgets and control your expenses while paying off your existing debt.
One Monthly Payment
While you are on the program, you will enjoy making one reduced payment a month, which leaves more money in your pocket at the end of the month. The reduced payment is the culmination of efforts on the part of the debt consolidation company. Their trained negotiators will call your creditors and successfully negotiate the removal of excess fees and lower interest rates. Once a verbal agreement is reached, a formal agreement will be sent to your creditors in writing, which will lock in your total account balance and your reduced monthly payment.
Once the negotiations are complete, a final monthly amount will be determined by the consolidation company that includes all the monthly payments for your credit cards and a small monthly fee for the agency. This monthly payment will be less than your current total monthly payments and will save you money each and every month.
Fast Debt Reduction
The lower interest rates and fee reductions will allow more of your payment to go towards the principle. This will further reduce the dollars spent on interest and allow you to pay your bills off much faster than if you had stayed with your traditional payment plans.
In recent years, more and more people who consider themselves financially responsible have fallen into what seems like unmanageable debt. Whether debts are caused by long spells of unemployment, health problems, education costs or something else, they can quickly spiral out of control. In addition to the financial worry, many people also grapple with shame and fear around their debts, and that sometimes prevents them from dealing with the problem.
To make matters worse, there are a number of shady enterprises that use misleading language to make it sound as though they are going to help debtors, but what they will really do is ruin the debtors’ credit rating and sometimes leave them in an even worse position financially. Bankruptcy can start to seem like the only solution. Debtors have another option, however, and that is a debt consolidation non profit service.
How Debt Consolidation Works
A debt consolidation non profit service should not be confused with either a debt consolidation loan or debt settlement program. A debt consolidation program will negotiate with the debtor and the creditors to agree upon a payment plan the debtor can handle.
Preparing for an Appointment
A person who chooses to work with a debt consolidation program will begin with an appointment with a credit counselor. Prior to the appointment, the debtor should make a detailed budget. The credit counselor will require information on money spent for everything from rent to groceries to incidentals. Using the budget information given, the credit counselor will determine the debtor’s eligibility for the program and will also provide further budget counseling or referrals if needed.
The debtor can visit a debt consolidation company in person or can conduct the initial counseling session over the phone.
Setting Up and Completing the Program
The debtor will then be entered into a debt consolidation program in which an agreed-upon sum is paid to the organization and then distributed among creditors. In this way, debtors can repay debts in a matter of months or just a few years and restore their credit.
Even the person who was prudent in setting aside an emergency fund may find it difficult to tackle multiple costly emergencies at the same time. A person who is having difficulties managing their debt due to unexpected expenses or other extenuating circumstances beyond their control may find that credit counseling is one of the best ways to address this problem. Credit counseling services are changing the lives of many people in several ways:
Peace of Mind
You can achieve peace of mind with debt relief.
One of the immediate changes a person sees when they start to seek debt relief is peace of mind. The person no longer has to worry about the repercussions for not doing anything to resolve the accumulating debt. Once enrolled in a program, all accounts can be brought current and the person can instantly begin to build their credit.
Money Management and Personal Finance Coaching
One of the pivotal moments in the person’s journey to financial freedom is the accomplishment of making it to the financial stages of the repayment plan. As the person receives counseling, they can begin laying the foundation for a secure financial future for their family. The coaching empowers the person to evaluate their financial decisions and learn how to rebuild credit. Learning the basics of personal finance through coaching is a service that most clients benefit from when they receive credit counseling. Some counselors even offer debt consolidation services that simplify payments and arrange favorable terms for their clients.
Debt Relief with Fewer Risks
The best credit counseling service offers a low risk way for a person to pay off any unsecured debts. Other forms of debt relief come with risks. Some forms of debt relief can put at risk of losing personal assets or being sued because of the loan. In program that includes a consolidation loan, a person can be assessed interest rates as high as 20 percent. The person can require even more time to pay off the debt. Bankruptcy makes rebuilding one’s credit much harder.
Entering a new chapter of financial freedom is an exciting moment. When the person feels as though they are in complete control of their financial situation, they are able to build a new life. Clients can enjoy financial freedom and peace of mind with the right counseling and education.
Being able to consolidate credit card debt is a great way to lower a consumer’s paperwork hassles and save money on interest charges. When credit card debt is consolidated, a consumer takes several different credit cards with varying interest rates and payment terms and combines them into one. This is usually done by paying off the balances on each card with a single payment every month.
When consumers consolidate credit card debt, they first thing that they notice is that the amount of paperwork they have to deal with on a monthly basis is greatly reduced. With only one payment to make instead of dozens, the odds of a person missing one of their credit card payments go down dramatically – a lot can happen if you miss a credit card payment. This makes budgeting for credit card payments a lot easier. Instead of constantly tracking how much is owed on each card, all a consumer has to do is make a single payment every month.
The credit counselors who manage a consumer’s credit card debt consolidation are able to distribute the payment among the consumer’s different creditors. In addition, these professionals are able to negotiate with credit card companies for the consumer. Because they have had years of experience in the field, as well as good relationships with the credit card companies, they are often able to get consumers better interest rates and payment terms than they could otherwise obtain on their own.
Going through the process of credit card consolidation is fairly simple, and the results are great. Furthermore, it is possible to pay less each month while making more progress on the debt than a person would have done otherwise. Because a trained professional is handling the consolidation, it is possible to pay more on the principal of the loan, eventually eliminating the debt, than just making payments on the interest each month.
Every person will encounter financial challenges from time to time. This means that individuals are often put in a situation where they feel the pressure to make a quick financial decision regarding their debt. Many car owners have found themselves in such a situation. When faced with the choice of whether or not to transfer the total balance of the car loan to a new credit card, what is the best choice to make?
Sometimes the person transfers the total amount of the auto loan to the new credit card. The person must then pay the minimum amount owed each month in order to avoid penalties on the new card. The person also has to work to make sure that the entire car loan is paid off completely within a certain amount of time to avoid double-digit penalties, fees and interest and do so without falling behind on any other financial obligations.
The best approach is to simply consolidate any credit card and auto loan debt into a debt counseling program. The credit card debt relief program gives the person latitude and flexibility that would otherwise not be available under the credit card transfer scenario. The person doesn’t have to worry about the pressures of catching up with the past due amount on the new card and doubling up on subsequent payments to satisfy the minimum balance requirement. He or she doesn’t have to plan for a sudden rate increase after becoming acclimated to paying a certain amount as one would in the auto loan credit card transfer scenario when the introductory rate ends. The individual doesn’t have to shuffle between credit cards to keep up with the minimum balance requirements for the new credit card. The person simply works through a comfortable payment schedule without worrying about fees or penalties until the car and other debts are paid off.
Some people are able to handle the auto loan transfer balance with no problem if there aren’t any student loans, mortgages, outstanding medical bills or other debt obligations to manage. Most people, however, would be in a better personal finance situation if they entered a credit card debt relief program. In these programs, the person gets the advantage of having maximum flexibility in repaying the debts and access to personal finance coaching if desired.