Debt Management| Bad Credit Loans, Personal Loans, Getting a Loan

Payday loans are primarily regulated by state laws, although some federal laws do apply. For instance, by federal law all credit must post the APR to consumers before the application is completed.

In most states, cash advance lenders cannot garnish your wages. But they can collect outstanding payments through a variety of means. A better option is to work with your lender to create an alternative payment schedule to help you get out of debt.

What Payday Loan Lenders Can Do

When you get your cash advance, you also give the payday lender permission to withdraw your loan amount plus finance fee on your next payday. Even though it may be debited from your account, it is seen as a check.

If you bounce your check with the lender, they will charge you fees as well as your bank. What a lender will do after that depends on your state laws.

In some states, such as Virginia, you can be taken to court and billed for the loan and lawyer fees. However, in states like Washington, you can’t be threatened with criminal charges for defaulting on payment.

Stay Out Of Trouble

Payday loan lenders offer flexible payment schedules to help you stay out of trouble. Your first option is to pay the finance fee and delay principal payment of the loan until your next payday. But you want to negotiate this option before your check comes due.

After three paydays, most lenders will require full payment in accordance with most state laws. However, if you cannot pay the loan, they will develop a payment schedule. It could be something like $50 every month until the loan is paid off.

The worst situation is to rack up late fees and NSF fees, then try to negotiate with your lender. By that time, you are out hundreds of dollars and may be hauled into court.

Prevention Is The Best Option

Prevent getting behind on your payments by making your loan payment your first bill due on payday. Payday loans are great for getting through financial emergencies, not for long term debt. If you do need credit for a longer period, look into opening a credit card.

See my recommended Cheap Payday Loan companies online.

Carrie Reeder is the owner of ABC Loan Guide, which offers help with loans for people with bad credit.