What is a PayDay Loan?

//What is a PayDay Loan?
What is a PayDay Loan? 2018-05-20T00:13:03+00:00

What is a PayDay Loan?

We hate to see anyone caught in the lonely and frightening payday loan cycle. Hearing it from the collectors every day and trying to do the calculations that will enable you to stay “current” on the payday loans while still having enough to eat and pay the bills is no way to live.

If you haven’t taken one out before, a payday loan is a short term loan that becomes due and at the time of your next paycheck. As many of our clients know, these loans don’t come cheaply, nationally the typical fee is between ten and twenty five dollars for every $100 borrowed–which equates to an annual percentage rate of over 350%.

Despite the fact that both Oregon and Washington have attempted to legislate the rates on these loans, the above rates still exist online. Even the slightly lowered rates imposed throughout the Tacoma, Seattle,  Portland, Vancouver and Salem areas are enough to put any working family in the poor house.

The fact is that these loans are never a solution. Paying one off on time in and of itself is a losing proposition, but paying them off late is a disaster. Paying them off late means that the loan gets rolled into a new one, interest added to the principal and you owe an even more ridiculous amount by the time your next paycheck rolls around. All the while, the pay day loan collectors are getting more and more aggressive.

The good news is that in most bankruptcy cases, payday loans are simply treated as unsecured dischargeable debt that is completely and easily eliminated through the filing process.

At Northwest Debt Relief, we understand the payday loan cycle. One of the main reasons that we have structured our fee arrangements with our clients so that they can pay their post-file attorney fees after their cases are filed is because we know that doing it any other way keeps people in the payday loan cycle.

There is no way our clients are going to come up with large sums of money to get a case filed while they are dealing with payday loan lenders. We aim to be the one company in your life that isn’t asking you to do the impossible. Call us today.

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Written by Tom McAvity, Esq., bankruptcy lawyer
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