How to Deal With Defaulted Internet Payday Loans

A payday loan, also known as a cash advance, is a short-term loan that most consumers are eligible for. Unfortunately, payday loan companies charge hefty finance fees for the privilege of borrowing money, and many customers end up not being able to pay them back, or defaulting. There are ways to deal with defaulted payday loans if this occurs to you.

Instructions

1

Speak to the payday loan company to see if you can set up a re-payment schedule for the loans. It may be more difficult to find an actual phone number to talk to a real-live person with Internet payday loans, and it can be a much harder process than going to a local office. However, most companies will have a phone number or at least an email address by which you can contact them to address your concerns.

2

Ask if you can settle for a reduced amount if you pay off the defaulted loan in full. If you offer a payment over the phone with a debit or credit card, or even by mail, the collections company may offer you a discounted rate, or you may be able to re-pay the loan amount only, minus all finance fees.

3

Know your rights as a consumer and the laws regarding payday loans in your state. (See References 1) Make sure that the company has not charged a higher finance fee than they are legally allowed to and that they have offered you every alternative in repaying your loans before sending them into default status.

4

Speak to an attorney if you believe the company has violated the law or your rights, such as charging too high of an interest rate. They may be able to intercede on your behalf and stop the collection calls while you work out what to do about the defaulted loans. If you cannot afford an attorney, speak to your local welfare office to see if they have any free or low-cost options available for those who are in trouble with debt.

5

Take out a bank loan to pay for the defaulted payday loans. The APR on a bank loan will usually be lower than the rate on a payday loan, which will save you money in fees in the long run. If you owe a small amount on your defaulted loan, consider borrowing money from family or friends.

6

Talk to a credit counseling company for help on defaulted payday loans. They can offer you advice on how to pay off your loans when you are on a tight budget. These companies may also be able to talk to a collection company on your behalf. They will charge a fee, but this can be factored into the payment plan they'll offer to consolidate the debt.

7

Talk to the agency that is handling your case if the payday loan has gone to collections. They will usually work out a re-payment plan that will allow you to re-pay your loan in a reasonable period of time.