How to Deal With Defaulted Payday Loans

Payday loans can be helpful for customers who have little or bad credit, and who need to get money fast. They are also known as cash advances, and can be found locally or on the Internet. However, these companies charge high fees for the privilege of lending money to higher-risk persons, and many times borrowers cannot pay them back. If you default on a payday loan, there are ways to take care of it, so you can start rebuilding your credit.

Instructions

1

Talk to the payday loan company that you originally received the loan through, if the company hasyet to turn you into a collections agency. Ask if you can set up some time of payment plan to pay off the loan that you owe. Often, the company will be willing to work with you to get back the money borrowed.

2

Do not ignore the collection calls that you receive. Speaking to the company lets it know that while you are in default, you may still be open to a payment plan or negotiation. Remember, you are still a consumer that has rights, so do not let the collections agency harass or intimidate you.

3

Discuss with the collection agency whether you can get a discounted rate if you offer to pay the whole amount off in one lump sum. With so many accounts in default every day, collection agencies are usually willing to settle for an amount lower than what you originally owed.

4

Read up on the state laws regarding payday loans. Each state has different regulations for payday loans, and the company you defaulted with may have broken one of them. This can help you when you are dealing with your defaulted loans.

5

Sign up with a debt consolidation company that can help you with your defaulted payday loans. This is especially helpful for those who may have more than one loan in default, or borrower's with particularly high finance fees to deal with. The company can consolidate all of your debt and offer you a payment plan that you can live with.

6

Borrow money to pay off the defaulted loans, from your bank, credit union, family or friends. You may even get a cash advance on a credit card to pay off the defaulted loans. While you will then incur another debt, the default will be resolved, and you can work on rebuilding your credit.