Unmanageable debt. Overwhelming stress. Potential bankruptcy. Those are just a few of the things payday loan borrowers have to look forward to. The unfortunate truth is that 80% of payday loans are either rolled over or renewed. This continual rolling over of payday loans, accruing more debt and fees and falling deeper into the hole, leads to overwhelming financial debt and hardships.
Payday loans are debt traps. While the typical payday loan has a two week repayment period, many borrowers do not pay off their loans for an average of 175 days . That’s nearly 6 months! During this period, the loans are accruing interest at nearly 400% or higher and are racking up fees. This report from the Consumer Financial Protection Bureau found that the majority of payday loans are made to borrowers who renew their loans so many times that they wind up paying more in fee expenses than the total amount of money they borrowed. These aren’t just opinion. They are statistics. And the statistics show that for many, payday loans lead to an inevitable debt overwhelm that takes months (sometimes even years) to get out of.
Stress & Anxiety
We work with hundreds of payday loan borrowers every single day. The biggest problem they’re facing is not the debt of their payday loans. It’s the stress and anxiety caused by their payday loans and the overly-aggressive,
forceful lenders they’re dealing with every day. For many payday loan borrowers, they haven’t seen a paycheck in months. Each payday, their paycheck is automatically debited from their bank account by payday lenders. They’re also receiving harassing, threatening phone calls everyday from payday lenders and con artists that are preying on payday loan victims with spams and lies. The sheer overwhelm of balancing financial instability, harassment, and scams leads to feelings of being trapped and losing control.
Payday loan users are more likely than those without payday loans to file for bankruptcy. This study found that when payday loan users were compared to similar low-to moderate-income households who did not use payday loans, there was almost three times the rate of bankruptcy. In a completely different study , researchers found that borrowers who received payday loans were twice as likely to file for bankruptcy in the following two years when compared to loan applicants who were turned down for payday loans. Payday loans inevitably lead to a deep debt trap. For too many, though, that trap becomes so financially overwhelming that it results in bankruptcy.
If you’re struggling with overwhelming payday loan debt… If you’re tired of aggressive payday lenders debiting your checking account and calling nonstop… We can help. Give us a call today . Our team will work with you to, first and foremost, get the payday lenders out of your bank account so that you can take back control of your finances. We’re here to support and guide you throughout the process. We’ve done so with hundreds of people before and have the experience and knowledge you need to end the debt trap cycle.