In today's tough
economy where a lot of people are in need of financial assistance and too many
predators take advantage of their desperation, it is nice to know there are
businesses that can offer assistance.
Payday loans have
become a $40 billion industry where over 23,000 lenders trying to foster the
idea that they are helping out cash-strapped borrowers by offering a payday
cash loan when in fact the help really comes from people like Ryan Phillips of
Relief, LLC, debt solution and loans consolidation specialists who know the ins
and outs of settlement laws and negotiations and work with lenders on behalf of
borrowers to stop harassing phone calls and get a fair and equitable settlement.
I caught up with Ryan
at his offices in Sherman Oaks, a suburb of Los Angeles, and here's what he had
to say about payday cash loans and Relief, LLC.
DH: What is a payday
cash loan?
RP: Payday Cash Loans are basically short-term,
high interest loans. They are usually obtained from either a walk-in storefront
or from a company on the internet. Most people get these high interest loans
when they need help tiding them over to their next payday.
DH: Aren't they a good
thing in today's economy?
RP: This is a difficult question. I believe there
is a legitimate use for payday cash loans if used responsibly. For example, if
someone needs money to temporarily hold them over until their next payday and
they are 100 percent sure they will pay the loan in full at that time, using
this service would be less expensive than bouncing a check or an automated
payment.
However, too often
when the paycheck comes, people would rather pay only the interest and keep the
rest of the money. Before they know it, weeks, even months have gone by and all
they've paid is interest payment after interest payment. The problem is that
payday lenders bank on the fact that most people won't pay the loan off
quickly. I think this plus the lack of regulation in the industry, especially
with internet lenders, means that people are often given loans they should not
be given.
We see clients that
have 15 or 20 payday cash loans totaling over $10,000. We see people who spend
almost their entire paycheck just on interest fees to payday lenders. Obviously
this can only go on for so long before the person needs to declare bankruptcy.
So without some type of regulation to ensure that people do not get in over
their heads then this type of behavior by payday lenders will likely continue
to contribute to the current crisis of giving out too much credit.
DH: What would you
recommend instead?
RP: I would say try borrowing money from family or
friends, if possible. I know this can be emotionally difficult, but friends and
family won't get you further in the hole.
For those who don't
have friends or family they feel they can ask, maybe their employer can give
them an advance. It is in the employer's best interest because financial
worries can cause stress both at home and on the job.
The most important thing
is to be really honest with yourself about how much you owe and when you can
pay the loan back -- then weigh your options.
DH: What can borrowers
do if they get caught in the payday cash loan cycle of debt?
RP: That is exactly why Relief, LLC was created. We
wanted to help educate people and to be an advocate on their behalf when they
find themselves caught in this trap of getting one payday cash loan after
another in an effort to pay each previous loan off. At Relief, LLC we get into
serious negotiations with payday lenders to give the borrower a little
breathing room and to give them some time to get their loans paid off. When and
where possible we also get them a settlement on the loan to save them money.
This is the essence of our loans consolidation program.
DH: Can't borrowers
just end the cycle on their own?
RP: Of course, but it is very stressful to try and
deal with professional collectors, especially the payday lenders who have
structured their companies to be tough with people who don't pay.
And think about it.
The borrower is already stressed about not having the money to pay and now they
have to deal with the frustration and muster the energy to haggle and negotiate
with collectors; collectors who are trained to find any angle to bully, push
and work the borrower until they feel they would be better off finding a way to
pay just so they don't have to talk to the collector again. Now consider that
the borrower probably has five or ten of these loans. It makes it very
difficult.
DH: So how are the
services of Relief, LLC, different from other payday loans consolidation
companies?
RP: Exceptional customer service. We truly care
about our clients and want to help them out of their financial stress.
If our clients are
being harassed by a payday lender we respond immediately to get collection
tactics stopped. Plus we have an excellent track record of getting payday
lenders paid off quickly. A lot of other companies don't even pay the lenders
until the end of a client's program which can be 6, 9 or 12 months long. This
can make things very stressful for the client in the meantime. And we've been
told we offer some of the lowest rates compared to our competitors.
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