How To Get Out of Payday Loan Debt in California In 5 Easy Steps
If you need payday loan help in California , it can be hard to know where to turn. The cycle of debt can spiral out of control even if you just miss a single payment, and you can lose control of your finances quickly on your own.
What If I Stop Paying My Payday Loan In California?
If you stop making payments on your payday loan in California, there can be wider consequences than you expect. Many payday loans have more than a 400% annual percentage rate (APR), meaning that any outstanding debt will multiply quickly. In California, payday lenders can loan up to $300 and charge up to $45 in fees and interest, which is a maximum of 372% APR.
Because the terms of payday loans are so short (often less than two weeks), the fees for taking out a payday loan stack up much faster than with regular credit. It's also important to know that applying for a payday loan doesn't count as a hard inquiry against your credit, so you can often get a payday loan even when the lender knows you'll have trouble paying it off.
If your payday loan ends up going to collections, it will impact your credit score. As soon as your payday loan debt goes to a collections agency, it will show up on your credit report for at least 7 years, making it even harder to get other forms of credit. This can make many elements of your life harder because
- You'll have trouble qualifying for an auto loan if you need to replace your car
- You'll pay more in rent and have difficulty renting a home or apartment
- You may even pay more for utilities such as Internet and heating
Does an Unpaid Payday Loan Impact Your Credit Score?
Any debt you incur has an effect on your credit score, regardless of whether it's:
- credit card debt
- medical debt
- debt from a payday loan
If you pay the debt in full and promptly, the impact on your credit score will be positive or neutral. However, payday loans are difficult to pay in full due to their high interest rates and unforgiving terms . This can easily lead to a feedback loop in which the only loans you can qualify for are payday loans, which you will then have trouble paying back.
How to Get Payday Loan Debt Relief in California On Your Own
The process of getting payday loan help in California can be difficult to navigate at the best of times, and when the bills are stacking up, it can be especially daunting. There are a few ways you can reduce your payday loan without paying it off, and they all have risks and benefits.
|Negotiate with the payday lender yourself.||Many lenders will offer deferred payment plans or reduced interest if you're willing to work with them on your debt. You may also be able to consolidate your loans into a single loan with lower interest, depending on your circumstances. It can be difficult to know where to begin with this step; in general it's a good idea to start with the lender and then move up the ladder if needed.|
|Hire a debt consolidation company.||These companies do have an initial cost, but they can help you navigate the process of renegotiating your payday loans and can sometimes get you more favorable results than negotiating on your own. However, DoNotPay lets you bypass these companies entirely.|
|Declare bankruptcy.||This is the most extreme solution to debt, and it will have many negative long-term effects on your credit and your life. You may lose access to any credit cards or lines of credit you have, and you'll have trouble getting credit for years in the future. You may also lose your property, including your home or vehicle.|
How to Get Payday Loan Help in California with the Help of DoNotPay
If you 're in California and need help lowering your payday loan , DoNotPay can help you in just 5 easy steps. This is a vast improvement over doing it yourself, which can be a complicated and difficult process. Instead of going through the complaint process yourself, simply:
- Search "Negotiate Payday Loans" on DoNotPay.
- Enter the state you took out the payday loan in.
- Tell us the amount you borrowed, the date you took out the loan, and when the payment is due.
- DoNotPay will automatically calculate the APR on your behalf, and determine the best way to negotiate your case based on the amount.
- You're all set! You can generate your personal negotiation letter with one click, and use it to contact your lender to get better terms for your loan.
What Else Can DoNotPay Do For You?
Payday loan debt relief in California is just one of the things DoNotPay can help you with. DoNotPay can also:
- Create virtual credit cards so you don't get charged for free trials
- Get you help with paying your utility and medical bills
- Help you report (and be compensated for) fraudulent robocalls
- Help you appeal parking tickets in any city
- Lower your property taxes