When you need to negotiate debts with your payday installment loan lenders, there are several things you need to consider carefully. Also, it is important that you are well-prepared before you approach your lender and negotiate debts. Here are some key points you need to consider:
1. Be aware of the legal regulations and status of payday installment loans in your state.
This is important because the more informed you are about these laws and your legal rights, the more efficiently you will be able to negotiate debts and get a good deal on a loan. In the latest reports, the majority of payday installment loan lenders have some illegal and fraudulent activities. Some lenders can also treat you unfairly if you are not well-informed about the law.
For example, it is possible that your state may have banned all sorts of payday lending, but an online lender has issued you a payday installment loan. In this case, if you didn’t know that the law does not obligate you to repay the loan with interest and also the penalty charges, then you will be spending a lot of money paying the lender back. So, if you deal with one, you can immediately report the illegal activity and file a complaint against them. Moreover, if collection agencies keep harassing you for an illegal loan, you can file a lawsuit against them and ask for compensation. However, in most cases, you will still be legally obliged to repay the principal amount of the money you borrowed.
2. Check the Statute of Limitations with regard to your debts.
For very old payday installment loan accounts, usually 2 to 3 years old which have been issued legally, you are advised to look into your state laws and find out details about the statute of limitations applicable for these debts in your state. Generally, the statute of limitations ranges from one to four years, and in some cases, even longer. So if your debts on payday installment loans have reached the statute of limitations, your lender should stop all collection attempts and you are no longer held legally liable to repay the debt. The statute of limitations is the specific period of time when payday installment loan lenders lose their right to collect unpaid debts.
3. Finally, find out what provisions of the law that apply to consumers rights to negotiate debts with their payday installment loan lenders.
In line with the growing debate on whether payday installment loans are good or bad, the FTC (Federal Trade Commission) has warned consumers against lenders who may take advantage of their financial woes. For example, some states have strictly prohibited the provisions of rollovers and renewals. In other states, it has been mandatory that lenders should offer affordable repayment plans and means to negotiate debts for borrowers who are going through tough financial situations or who are unable to repay their debt. Knowing these provisions will help you use these in your favor and negotiate debts with your payday installment loan lenders more effectively.