The following article is a guest post from Marlon at Debt Consolidation Care.
Payday loans are considered by most to be an easy option to get some quick cash. However what most of the people fail to understand is that payday loans can prove to be hazardous. The majority of these payday loans are companies that are not even licensed to do business in your state or they simply are scams. As a result, most of these payday loans end up being rip-offs. Individuals who take out payday loans intending to pay off debts normally only end up incurring more debts.
Payday loans and collection scams
Payday loans can also give rise to collection scams. With that being said, don’t fall into the trap of taking out payday loans in order to pay off your debts or to manage monthly expenses. Payday loans can be alluring because they are very easy to obtain. These days a credit check is not even required. Don’t let this persuade you, it is better to avoid taking out one. These payday loans have high interest rates making it really tough for you to pay back the loan.
If you’ve already taken out a couple of these payday loans…don’t panic. First of all try to find out the payday loan laws in your state. Secondly, try to find out if the payday loan company is even licensed to do business at all. You’ll find that in most states, payday lending has been declared illegal which further proves why it is so important for you to avoid these types of loans all together.
After doing your research you find that your state doesn’t allow payday lending and especially if you are receiving collection calls then you’re rights have been violated and you must take action to avoid further calls.
If you are getting collection calls you need to first determine if the collection calls on the payday loans is just a scam. You will have to try and find out if you ever had taken out any payday loans. If you have never had taken out any payday loan, it would be better to avoid the calls. This is because, in most of the cases it has been seen that the collection agencies do harass people over payday loans even if they have no links with the same. Rather than panicking over such a situation, it would be better for you to handle the situation with firmness. If you are sure that you have never taken out a payday loan simply dismiss the calls.
However, if you are aware that you had taken out payday loans, first check if your state at all allows payday lending. Then check if the payday lender has the license to lend money. If the payday lender does not have the license and if your state does not allow payday lending, you will be required to pay back only the principal. Otherwise, you can try consolidating the loans to pay those back.
Ultimately, pay day loans are a rip-off and you should be avoided.