If you’re reading this, it’s likely you’ve been searching for information on payday loan credit checks. That probably means you or someone close to you doesn’t have great credit. If that’s not the case, it very well might be if you choose a payday loan to ease your financial shortfall. Afterall, just because payday loan providers don’t run a hard credit check does not mean you should turn to such predatory loans when your credit is less than impressive and you need money fast.
How Payday Loans Hurt Consumers
There are good reasons why payday loans are typically associated with terms like debt spiral, debt cycle, debt trap, and debt nightmare. These companies target desperate, cash-strapped consumers who are willing to accept horrible loan terms with high interest rates, expensive fees, harsh penalties, and near-instant payback time-frames.
Credit Karma provides a detailed explanation of how these loans work and how the costs mount up—with interest rates as high at 400 percent! With that information, you can see how an initial $500 loan can snowball into more than $2,000 in principal, interest, and fees in one year and can push you into a debt hole you’ll find difficult to climb out of on your own.
The Consumer Financial Protection Bureau (CFPB) recognizes the dangers of payday loans. In 2017, the agency created a new rule to protect consumers from the predatory practices of payday loan companies. Unfortunately, bureaucracy is slow, and those protections were overturned before they could ever take effect. So, it’s back to “Buyer Beware.” Once again, it’s up to the consumer to protect themselves with the knowledge of smart lending practices.
Getting Out of Payday Loan Debt
If you’ve already become the victim of the payday loan debt spiral, there is help available from Progressive Debt Relief. Our team works with debtors to help them settle unsecured debt. We negotiate with payday loan companies to minimize what you owe. Not every provider is willing to negotiate a lower settlement. But for the ones who are, we work hard to make arrangements that work for your unique financial situation. Contact us to learn about our debt relief services and how they can help you achieve a debt-free life.
