Payday loans are a quick and easy way to get the money you need for emergencies that come up unexpectedly. When individuals apply for these payday loans, they usually don’t factor in the cost of the money or any future ability to pay back the loan. The main purpose of them obtaining a loan is to meet an immediate need. Borrowers don’t realize the adverse impact until they are too deep into the loan and not able to repay the loan after a period of time. It is during this time that customers seek alternatives such as bankruptcy as a form of payday loan debt relief or look to the services of a company to help to consolidate payday loan debt. Payday loan debt can cause a huge financial burden to consumers. Consumers look for payday loan debt relief with companies or with the government. Help with payday loan debt for consumers can be confusing and they are not sure who they can trust. When consumers are not able to turn to companies for payday loan debt settlement services, they look for the government to attempt to regulate the business activities of these companies.
Payday loan debt for many is a tremendous burden. With the changes in payday lending regulations, consumers continually seek help with payday loan debt. Federal regulations allow for paydays in 27 states where they are legal. There are 9 states that provide regulation for some type of short term lending. These loans, however, do come with some restrictions. Considering how payday lenders do business, it makes consumers wonder if the regulations are in favor of the consumer or the payday loan companies. Lenders are still utilizing scrupulous practices in how they do business and collect payments. Under the previous administration, there were laws enacted to protect consumers. Payday loan companies were making strides to comply with the new laws in an effort to remain compliant with the attempts at new regulations. These regulations were aimed to protect the consumers and applicable not only for payday loans but vehicle title loans as well. Under the new administration, regulations are starting to move in favor of the payday lending companies.
The previous administration implemented regulations aimed to protect the consumer. More recently, the current administration is looking to roll back regulation in favor of the payday lenders. When consumers are faced with the challenges of payday loan debt, they look for ways to implement a plan for a payday loan debt settlement plan. The regulations are supposed to be in place to protect the consumer by ensuring they are able to repay their loans. Those regulations required lenders to perform the full payment test to determine if a customer can repay the loan. The regulations allowed for a cooling off period. One of the traps that consumers were getting into with the payday loan debt is utilizing payday lenders within a 30 day period. The new regulations would require a cooling off period of 30 days. Other protections include offering a principle off pay option and mandatory reporting. These regulations would require lenders to offer longer terms on loans to reduce the monthly payments and cap interest rates to 28%. These changes would assist consumers with reducing the amounts of their payday loan debt.
Regulations for payday lenders are supposed to be in place to protect the consumers and keep the lenders in check. Recently, there have been talks to roll back payday lending regulations. These rollbacks will get lenders back to their regular lending tactics and will leave consumers exposed to whim of lenders. In the efforts for consumers to relieve payday loan debt, they could succumb to the excessive fees and unethical practices that have given the industry a bad reputation in the first plane. The roll back of these regulations could affect millions of younger Americans, as they are the population who are beginning to use these types of loans.The Consumer Financial Protection Bureau has made the decision to abandon the previous administration’s loan stipulations due to the current administration’s rollback in protection. These changes and regulations are intended to completely dismantle the previous administration’s protection for consumers. This rollback in regulation would leave many young Americans vulnerable to the payday loan debt trap. These loans pose an extremely high-risk to consumers because of the high interest rates and shorter time periods to pay back the loans. Often, borrowers find themselves not being able to pay back the loans right away, which keeps them in a never-ending cycle of payday loan debt.
In theory, payday lenders have a business model that is predicated on predatory lending practices. They make astronomical profits on individuals who are, for lack of a better term, financially illiterate when it comes to interest rates and loan terms. These unaffordable loans make it challenging, if not impossible, for individuals to pay back the loans in a reasonable amount of time. With interest rates as high as 400% annually, consumers find themselves being stuck not knowing how to get out of these loans. The changes that the Consumer Financial Protection Bureau are implementing to rollback regulations for payday lenders makes one wonder if this is a result of the current administration’s efforts or an attempt to accommodate payday lenders in their efforts to achieve higher profits.
The overall effects of these changes can be detrimental to borrowers. The fact that the Consumer Financial Protection Bureau is rescinding the protections that were initially implemented, makes anyone wonder if this is a move they are making because they have no choice or are they becoming susceptible to the payday loan lobbyists who lobby on the behalf of these lenders. Is the current administration putting pressure on this regulatory body to remove or lessen the regulatory restrictions to benefit these lenders? Without these regulations in place to protect consumers, the amount of payday loan debt could increase astronomically. With the lapse or complete removal of lending regulations, consumers have no choice but to turn to companies that allow some sort of payday loan debt relief. Such companies would have a vested interest in protecting consumers and will work, in spite of the current Administration, to protect consumers and their rights. After all, if consumers cannot rely on the government to protect them, the other alternative is to work with companies that will keep the consumer’s best interest in mind.
There are companies that help customers consolidate payday loan debt. These companies will work to get consumers out of the payday loan debt they incurred when they signed up with these payday lenders. Not only will they work to get them out of this debt, they will assist them by educating them on how these loans really work. With approximately 23,000 payday lenders in the United States, this industry is not showing any signs of slowing down anytime soon. Companies such as Exit Payday Loans will work on your behalf to get you out and keep you out of these payday loan traps. If you are considering filing bankruptcy, there could be another option by utilizing the services of this company. You can go to their website and get a free quote on the services they offer. Their professional representatives are standing by to help you lower your monthly payments, consolidate multiple loans and lower your interest rates. Give Exit Payday Loans a call today. You won’t regret it.