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In order to manage debts from many payday installment loans, why not consider consolidating the loans. Payday installment loan consolidation has been regarded as one of the most effective ways to pay off and manage debts that are quite impossible to pay off individually. There are now many lenders who are offering to consolidate payday installment loans.

Just like choosing lenders for your payday installment loans, you must also carefully select the companies who will be consolidating your loans. You also need to consider several factors that will affect your decision about which type of consolidation program is the most suitable for you and your debt problems.

Here are some ways to effectively consolidate payday installment loans:

·    Have your multiple loan accounts switched to a single loan payment.

This method may not need the services of a debt consolidation agency to manage your debts because you can do this on your own. You can get expert advice from a credit counselor on ways to consolidate effectively.
With this method, you will pay off all your existing debts. But, find a lender who will give you low rates and favorable terms, with small monthly payments. You will be paying one big single loan and get rid of paying separate interest fees.  This option will not only provide you with an opportunity to manage debts but will also help your finances get back on track.

·    Enroll in a Debt Elimination Program.

This option of consolidating loans is suitable for those payday installment loan consumers who are going through extreme financial hardships, like losing a job due to a severe illness or accident. In this case, the debtor can contact a debt consolidation agency and sign up for a debt elimination program or debt settlement option. The agency will negotiate with your lenders to reduce your payments to finally settle the entire debt. If your creditors find your situation convincing and credible, they may agree to settle for around 30-70% of the total outstanding debt and write off the remaining balance.

·    Find a Debt Consolidation Agency that can manage your debts.

The most common way to effectively manage debts is by hiring a payday installment loan consolidation agency. These agencies provide programs that will help you with consolidating loans and paying off your debts easily. The agency will represent you and manage the debts you owe.

With the process, they also negotiate with your lender not only for a better repayment plan but convince them to write off the penalty charges. The agency will arrange for a single consolidated monthly payment that you will be paying to them. They will then disburse the money to your creditors. However, the agency may charge fees for their services but the fees are worth the peace of mind that consolidating loans gives you.

In explicit terms, when consolidating loans effectively, you must be able to find a lender who can not only get you out of debt but will also help you manage debts responsibly.

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Sometimes consumers of payday installment loans had a hard time paying off debts. This is when debt consolidation becomes vital. When you consolidate debts, all your unsettled accounts will be paid in a single payment.

If you are planning to consolidate debts, especially with your payday installment loans, there are important things you need to consider. Since the payday lending industry has been associated with predatory practices, it is important that you deal with legitimate lenders before you consolidate debts. You also need to consider looking into specific laws applicable in your state regarding debt consolidation and other matters regarding paying off debts.

The following are helpful guide questions if you are planning to consolidate debts of your payday installment loans:

1.    Is Your Payday Installment Loan Lender Storefront or Online?

It is more difficult to consolidate debts with online lenders than with lenders located in storefronts. Many online companies do not disclose their exact physical location. If this is the case, you should contact your online lender to provide you with their address so you can settle your debts with them.

2.    What Loan Companies did you borrow from?

When you have determined you want to consolidate all the debts of your payday installment loans, you need to prepare a list of your loan companies or lenders. When you have the list in hand, do a thorough background check of each lender your are considering by checking their records at the Better Business Bureau. Determine whether the lender you are dealing with is licensed to offer payday installment loans in your state or not. If they are not, do not use them for consolidation.

3.    How much do you owe your lenders?

After listing all the lenders you have borrowed from, the next thing to do is consider how much you owe each one. You need to determine the total number of payday installment loans you have borrowed, when you borrowed them, and how much is the principal amount of each loan. It is advisable that when paying off debts, you start with the older ones with higher interest rates to avoid the accumulation of even larger debts.

4.    How much are the rates and fees charged by the loan companies?

The government has imposed caps on how much may be charged for a payday installment loan. Before you consolidate debts, check out the laws applicable in your state and if your creditors are charging you rates and fees allowed by law. If the amount has exceeded the maximum limit imposed by the state, you have the right to refuse to settle the debt and you can even file a complaint against your lender.

5.    Have your loans been renewed or rolled over?

There are certain states that have restricted the number of times a payday installment loan can be rolled-over or renewed. Make sure that all the loans has been rolled over or renewed within the state limits before considering paying off your debts.

Before planning to consolidate debts associated with payday installment loans, it is important to educate yourself about the laws applicable in your state. If your lender is practicing illegally, you have the right to not pay off your debts in order to protect yourself against predatory lenders.

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If you are having trouble with your payday installment loan, there are credit counseling agencies who can help you with debt management plans. These agencies employ debt counselors who are certified and trained in handling concerns about consumer credit, financial and debt management planning and reasonable budgeting. Most of these agencies are non-profit and non-government organizations that provide education and counseling to struggling payday installment loan consumers.

However, due to the increasing demand for credit counseling, there is an increasing propagation of fraudulent credit counseling agencies. According to the Federal Trade Commission (FTC), the nations leading consumer protection agency along with some state Attorney Generals, since 2011, they have sued almost 300 illegitimate credit counseling agencies. These agencies deceive their consumers about the cost, nature, and benefits of the services they are offering and have even lied or misrepresented their nonprofit status.

There are some complaints received by FTC regarding the high fees charged that are not disclosed in the contract. These fees are named “voluntary” contributions but actually put you to deeper debt. Some of these agencies offer little or no consumer education and counseling.

Ideally, when you apply for a debt management plan, you need to send money every month to a credit counseling agency. The agency will use this money to pay off your bills, payday installment loans, and other creditors. Using this process, your creditor may agree to give you lower interest rates and waive certain penalty charges and late fees.

However, some credit counseling agencies do not use the money they are receiving to pay other creditors. So be sure to keep these tips in mind when using a debt management service:

·    Contact your creditors and confirm with them that they have accepted the proposed debt management plan before you send any payments to the credit counseling agency which set up the plan.

·    Be sure to make regular and timely payments. This is your opportunity to make good on your credit standing. Also, falling behind on your scheduled payments will cause you to have your accounts reported as not current and will incur “late” marks on your credit report.

·    Review thoroughly your monthly statements and make sure that your creditors are getting the payments intended for them according to your debt management plan.

·    In case you cannot keep up with the scheduled repayment, contact your credit counseling agency immediately. This will help you inform your creditors so they are able to make necessary adjustments. Not paying on time will destroy your goal to pay off your debts along with any benefits you get from the debt management plan such as, low interest rates and fee waivers.

·    When choosing the agency to deal with your debt management plan, use these guide questions:
What services do they offer?

Are these services licensed in your state?

Do they offer free information?

What are the qualifications of your counselors?

Are they accredited or certified?

What are their fees?

Do they have set-up and/or monthly fees?

Will you be required to sign a written agreement?

How do they maintain the security and confidentiality of the personal information of their clients?

In times where fraud and scams are increasing, consumers of payday installment loans must be vigilant and watchful. In case of problems, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261 or report to government authorities nearest you.

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There has been increasing complaints related to payday installment loan fraud. In fact, in 2011 an Internet Crime Report conducted by the Internet Crime Complaint Center revealed receiving over 300,000 complaints about online loan fraud with a reported loss of $485.3 million.

The complaints related to payday installment loan fraud has dramatically increased to approximately 3.4% since 2010. In 2011, there were aproximately 26,000 complaints per month. According to Assistant Director of the FBI’s Cyber Division, Michael Welch, “Internet crime, especially online loan fraud, is a growing problem that affects computer users around the world and causes significant financial losses. With the help of the Internet Crime Complaint Center, an efficient way to report such infractions has been provided to help report suspicious e-mail activity, fraudulent lenders, websites and other Internet crimes. These reports help law enforcement make the connection between cases and identify criminals.”

With this in mind, many legislators have attempted to stop consumers from using payday installment loans. However, these loans are the most convenient financial resource for people to turn to for getting the instant cash they need. Payday installment loans offer the quickest solution to all people facing financial trouble. So, how can consumers protect themselves from online loan frauds?

Actually, there is nothing wrong with working with an online payday installment loan lender; however, you need to exercise caution when surfing online. There are several online loan scams that masquerade as legitimate lenders but are really aren‘t.

To protect yourself from being a victim of online loan frauds, here are some basic tips to keep in mind:

1.    Do not consider unsolicited and too-good-to-be-true offers. One example of this is e-mail spam. A lender who keeps sending e-mail is most likely a fraud.

2.    Beware of lenders who ask you to pay for an upfront fee. Never pay a fee to any online payday installment loan lender in order to have money deposited into your account. Legitimate lenders do not ask upfront fees, only processing fees.

3.    Research the lender you will be dealing with thoroughly. Conduct extensive research regarding identification specifics of the lender to help you determine if they legitimate or not. Doing a random search will also help you find lenders who can offer you the best deals and rates suitable for your needs. You may also check the reputation of the lender with the Better Business Bureau.

4.    Beware of electronic fund transfer agreements. EFT agreements allow your lender to have access to your bank accounts. Therefore, you need to research first your lender before giving them your bank account information.

5.    As much as possible, report any suspicious-looking lenders and websites to the Better Business Bureau and other authorities. There is no better way to catch these culprits than to take action against them.

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Payday installment loan consumers have been warned about online loan scams. The Consumer Federation of America (CFA) has been relentlessly reminding consumers of abusive practices of payday installment loan lenders and the high annual interest rates (APRs) of these loans that may reach as high as 650%.

Loan scams are not limited to frauds. They may also give misinformation to consumers by not disclosing valuable information associated with their loans and use other abusive lending practices. In short, abusive lenders are referred to as scammers because they mislead consumers by not informing them the true cost of their loan.

In a study conducted by the CFA, there are only 38 online payday installment loan lenders who willingly disclose their annual interest rates to their borrowers and there are 57 online lenders who also disclose their finance charges. The law requires, in accordance with the Fair Debt Collection Practices Act (FDCPA), that lenders fully disclose all costs associated with their loans.

Many victims of loan scams that have filed complaints with the Better Business Bureau have lost hundreds of dollars using payday installment loans. This year the BBB has received complaints about loan scams against approximatly 75 different lenders. Stephen A. Cox, President and CEO of the Council of Better Business Bureau said, “Scammers who prey on payday installment loan consumers are not new and they are flourishing in an economy when so many are struggling to get by. The complaints received by BBB are only the vocal few and we know from experience that many people across the country are falling for this loan scam every day.”

As long as lending standards are fully established, scammers will continue to take advantage of struggling and cash-strapped individuals. The BBB advises payday installment loan consumers about ways to recognize the red flags of a loan scam:

·    The lender has a bad reputation or may not have one at all. To check this, key into a search toolbar the name of the lender and see if there are any complaints for fraud cases filed against them. You can also search on the BBB website to check for credibility. Trustworthy and reputable lending companies establish a good track record and value their reputation.

·    The lender is not legally registered in your state to do business.

·    If the lender asks you to wire money or to send a money order before receiving your loan or worse, wire money to another country, then beware.  Victims of loan scams are often told they are approved for a payday installment loan in return for an upfront fee for insurance or collateral. But after they pay, they never get their loan.

·    They have websites like Craigslist that look professional and often entice victims to fill out an online application form and provide bank account and Social Security numbers. But after a few weeks, they replace their name and use a fake business address.

If you have been a victim of these loans scams, you may contact your local Better Business Bureau and report to it to your police department. But if you are still planning to apply for a payday installment loan, take note of these red flags. As the famous line says, “Prevention is better than cure.”

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Online payday installment loans are becoming the most common financial resource of people who are in need of urgent cash. These loans are easy to apply and qualify for. The application is done online so you don’t need to leave your home in order to apply. Also, you can apply anytime since the lender is available online 24-7.

However, just like any loan, payday installment loans are risky. They have pitfalls that should be avoided. Accused of being predatory in nature, payday installment loans have inherent risks that consumers need to avoid. Here are some tips on ways to avoid them:

1.    Offer Online Applications

The most common complaint in the lending industry, especially about payday installment loans, are the online applications. Although applying online is very convenient for the consumer, scammers have been propagating the internet. The most common risk cited by the government and even the CFA (Consumer Federation of America) is the transmission of personal financial details and other identity information. Consumers are more prone to identity theft and unsecured access of their financial information.

Here are some tips on how these things can be avoided:

·    Type in the name of the lender into a search engine and see if many consumer complaints or warnings come up.

·    Check if the lender is affiliated with the Online Lenders Alliance or OLA that represents the registered online payday lenders in the country. Members of OLA follow a code of conduct that provides guidelines for responsible lending. All members are strictly obliged to comply and observe these codes of conduct.

·    Go through the online lenders website and read all the fine print carefully, assessing the tone and reputation of the lender.

2.    Loan Extensions and Rollovers

When a borrower is unable to cope with his payments, most online lenders automatically renew the payday installment loan or offer extensions of the loan. Usually, these repayment options come with additional fees. The borrower is left with the problem of paying off the loan and the associated fees.  If he cannot keep up with the payments he may get into an endless cycle of debt.

There are states that regulate loan extensions and rollovers, but some lenders have the ability to remodel the terms. So, as much as possible, avoid late payments and defaults. Extending and rolling over the loan should be avoided.

3.    Partial Disclosure of Fees and Terms

Although most states have issued a law against non-disclosure of loan details and the cost of fees, some lenders of payday installment loans still find loopholes in it. Unless the consumer is very cautious when reading the fine print of the loan and inquire about the lender, he may find himself paying than he should.

Payday installment loans are helpful sources of instant cash in times of emergencies. However, they have pitfalls, beware.

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When you need access to quick funds, payday installment loans can be a big help. They are specifically designed to provide immediate cash assistance in times of desperate cash needs. Aside from the quick access to funds, payday installment loans also provide a reliable financial option for people who are not qualified or have been turned down from traditional or bank loans.

Payday installment loans are unsecured personal loans. They can be easily applied for online by filling out an online application form. Processing and approval is quick and no credit checks are done. Some lenders of online unsecured personal loans may not require the faxing of documents. So, one may ask, are these easy-to-apply personal loans reliable financial options?

You’ve probably seen a lot of offers on the internet regarding these personal loans. Most of the payday installment loans that are repaid use a paycheck to make the installments. Lenders usually tell consumers that regardless of their credit scores, they can apply and qualify for these loans. However, the truth is that you generally need a good credit score, a moderate debt-to-income ratio and enough net income each month to cope with the monthly loan payments.

Although borrowers with bad or poor credit scores can qualify for a payday installment loan, they will have to expect higher interest rate compared to those with good scores. Lenders justify this by claiming they are at higher risk with borrowers who have poor credit scores.

Also, lenders may not look into your credit report, but they use the services of Teletrack to determine a consumers credit worthiness. The Teletrack is a credit reporting firm that provides credit information. The services of Teletrack help lenders decide what loan terms and deals they can give borrowers with poor credit scores.

Paying off your previous personal loans using payday installment loans is a reliable financial option as long as you make timely payments. If not, you are just putting yourself in more trouble. In addition, consolidating debts by using payday installment loans will help you focus on a single monthly payment and ease your burden of paying many separate debt accounts.

Furthermore, be careful about working with debt consolidation or debt settlement companies that require you to take out payday installment loans to pay off existing personal loans and debts. Some of these companies are only interested in collecting service fees rather than helping you settle and pay off your debts.

While payday installment loans can help you out of a financial hurdle or pay existing debts, getting a personal loan should never be your first choice to handle cash needs. Saving and paying in cash are still the most reliable financial options.

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The convenience of online loans, like payday installment loans, has been earning the patronage of people in need of immediate cash. Due to the increasing demand for payday installment loans, lenders offering these online loans have also increased. However, these loans come with high interest rates and expensive additional fees.

Despite the expensive costs associated with online payday installment loans, many people still turn to these financial options in times of desperate cash needs. However, the expensive costs, short repayment time and automatic renewal are not the only reasons that they are putting consumers at risk. The internet is loaded with fraudulent activities that are also putting online loan consumers at risk.

Online lending involves several dangers to their consumers. Online payday installment loans are often more expensive than the loans offered by storefronts. Aside from that, there may also be privacy and security issues involved during the application process. Even though it is easy to fill out an online application form and click the OK button, this simple process may turn out to be the action that puts you into a debt trap, making it hard to get out of the cycle of debt.
The Consumer Federation of America (CFA) has outlined 3 Risk Factors associated with online loans. They are the following:

·    Online lenders can be hard to track down.

Most lenders of online loans provide very little information about themselves. They may provide their location and phone number on their website, but these can be hard to track down. Authorities have been unable to enforce laws against them despite the numerous laws and regulations implemented regarding these lenders. Oftentimes, it is much easier to track down activities and locations of storefront lenders rather than online lenders.

·    Online borrowers are trapped in more serious debt problems than storefront borrowers.

Unlike storefront lenders where you can ask for extensions and make arrangements for alternative repayment terms, lenders of online payday installment loans are prone to have automatic renewal loan terms. Aside from that, online lenders automatically charge finance fees for late payments that are withdrawn electronically from the consumers bank account. In addition, defaulting loans are automatically renewed for an extra month.

The sad thing about this practice is that borrowers cannot do anything to stop lenders of online loans from doing this. In the end, many borrowers end up being trapped in serious debt problems. The process of negotiating with online lenders can be very complex because the borrower can only deal with the customer sales representative.

·    The borrowers privacy and security is at risk.

When filing online application forms on the website of an online lender, consumers are asked to provide personal identification details, such as bank account information, routing numbers, Social Security Number, complete address, and other pertinent personal details. This crucial information is given to unknown lenders who may be hard to locate. Thus, consumers will be at risk of either identity theft or giving others access to their accounts. Although there are security measures that are given to borrowers, online lending is risky.

If you have already applied for an online loan, you may be at risk but there are authorities that you can turn to for help. You can file a complaint against an abusive online lender with the Federal Trade Commission, your state Attorney General or your state regulator.

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Payday installment loans are a great help in times of urgent need. They are good sources of instant cash and can be paid off with your next paycheck. These loans are very useful in paying urgent medical expenses, huge car repair costs, or even household bills. Truly, payday installment loans serve as a handy way to get cash in tough financial times.

However, these are expensive and come with costly fees. If unpaid on the scheduled due date, lenders can offer extensions but with additional charges. If left unpaid over time, late fees accumulate making your debt increase even more. As a result, many consumers find it hard to get out of debt.

If you are stuck up with your payday installment loan debt and cannot get out of your debt problems, then you need to consider a debt consolidation option.  With debt consolidation, you can get help negotiating lower interest rates on your payday installment loan debt and combine multiple loan payments into a single monthly payment. With debt consolidation, you gain better control of your debts and help yourself get out of debt faster.

So how does debt consolidation work? There are specialized debt management companies that will help you pay off your payday installment loan debt through debt relief loan programs. These companies contact your lender(s) and try to convince them to agree upon a consolidated repayment amount that will help you pay off your loan easily. In debt consolidation, the consolidated loan amount is calculated at a lower interest rate to give you lower monthly payments.

If you are considering debt consolidation to pay off your payday installment loans, you have two options. One is to do it yourself by merging all your outstanding dues into one big loan or you can work with a debt consolidation company who will act as a mediator between you and your lenders. Both are good but there are some pitfalls.

When you do debt consolidation yourself, you can save money. However, most lenders will not work with you directly. They need some guarantee that you can really pay the outstanding loan. So if your debt problems are quite unmanageable, consider signing up with a debt consolidation company.

Debt consolidation companies can talk with your lenders and convince them to reduce interest rates and waive penalty charges. They can even negotiate merging all your loans into a single consolidated monthly payment. You make the payment to the company and they in turn disburse the money to your lender or lenders.

The services of debt consolidation companies charge a fee, usually a certain percentage of the total outstanding debt they are managing for you. Some companies may also charge a flat fee. However, they are not to charge you an upfront fee unless they have negotiated your loans with your lenders.

Keep in mind that when you consider getting the services of debt consolidation companies, they can really help you get out of debt and not put you in more. Take into consideration the affordability of the total monthly payment you have to make, the number of installments (in months), and how much you are paying for the services of the debt consolidation company you are dealing with. Be sure to read the fine print of your contract with them. And most of all, do not sign up with a company that is not registered with the Better Business Bureau (BBB).

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Payday installment loans are great sources of instant cash. These are to be used every once in a while, when an immediate cash need arises. However, most of the time people find themselves “trapped” in debt. If they are not able to repay their loan when it’s due, the tendency is to take out another loan in order to get by. In the long run, consumers fall into a cycle of debt.

Oftentimes, consumers don’t know how to get out of a payday installment loan and feel confused and embarrassed by the situation. However, there are options available for consumers. They can opt for a debt settlement.

In a debt settlement program, consumers are given an affordable monthly payment which is provided by a debt settlement company. The company will negotiate on your behalf with lenders. They can freeze collection harassment from these lenders and help consumers pay off their loans.

A debt settlement company sets up a new payment plan that will help consumers get out of debt within 6-12 months. However, the length of time it takes to pay off the loans and the amount of the monthly payment will depend on the amount of the payday installment loan debt incurred and the consumers monthly net income.

If you are considering debt settlement with your lenders, it is very important for you to know some of the basic things about payday installment loan debt settlement law.

1.    Lenders cannot force consumers to sell their assets (car, shares of stocks, properties) as payment for the unpaid loan.

2.    Lenders cannot garnish the wages of consumers to settle their payday installment loan debts, except under court orders. In fact, the Fair Debt Collection Practices Act prohibits payday installment loan companies from garnishing wages of consumers to pay off debts. Be aware that wage garnishment and liquidation of assets to settle debts is possible only if there is a court order ordering said action. If the court finds that the amount of debt can not be paid with the consumer’s monthly income, it may issue an order to sell assets or garnish the debt from the consumers salary.

3.    Lenders cannot file criminal lawsuits against consumers. The law states that non-payment of payday installment loan debts is a civil matter and is not considered as a criminal offense. Lenders cannot threaten that you will be put in jail if you cannot settle the debt.

4.    Unreasonable collection and physical or emotional harassment by lenders is prohibited by the Fair Debt Collection Practices Act. In fact, consumers can request lenders to stop calling them through writing because they are legally obligated to honor such requests.

5.    Debt settlement services cannot charge customers in advance. The payday installment loan debt settlement law states that debt settlement companies cannot charge an upfront fee on their services unless the consumer has settled his debts with his lender.

6.    Debt settlement companies should disclose the fees of their services through a written contract.  Consumers are advised to read the fine print of the contract and understand clearly the written provisions. In addition, consumers must check the ‘disclosure box’ in the contract that provides the cost of the services.

7.    Although lenders cannot file a criminal case against consumers, they can file a civil lawsuit. When they file such a lawsuit, the court sends the consumer a notice. The defendant must respond and attend court hearings or else the court can file contempt charges resulting in jail time.

8.    If  lenders are proved to be running their business illegally, consumers are obligated to pay the principal amount of the loan only. Aside from that, consumers can file complaints with the Federal Trade Commission and state authorities.

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