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HomeBlog Debt ReliefCurious News – Borrowers Love And Hate Payday Loans
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Curious News – Borrowers Love And Hate Payday Loans

March 6, 2013 by National Debt Relief

Upset man with hands on headDid you know that most payday loan borrowers have either a love or hate relationship with them? Every year around 12 million people get payday loans that average $375 each. However, only about 14% of these people have enough money to pay back the $430 in principal and fees they’re supposed to pay after the initial two weeks.

What borrowers do instead

What many of them do instead of paying off the loan is renew it as the $55 fee they will have to pay feels more affordable. This can easily lead to a five-month cycle where the borrower owes a total of $520 in fees, plus the principal.

How they’re advertised

The payday loan companies tend to advertise their loans as a source of cash for emergencies such as an unexpected car repair, medical bill or the like. However, 86% of those who use payday loans say they have a problem covering their recurring expenses such as their rent or utility bills. Sadly enough, 41% of borrowers have gotten another loan, pawned or sold their possessions, used their tax refunds or borrowed from family or friends.

Take advantage of borrowers

More than half of all people who get payday loans feel that they’ve been taken advantage of. But at the same time, they rate their customer service highly and 48% of the people who get these loans think they help borrowers more than harm them. In fact, 60% say they would get them again. And 37% said they were so frantic they would take out a payday loan no matter how bad the terms how much it costs.

A viscous cycle

The biggest danger of a payday loan is when you start rolling the first one over into a second two weeks and the second two weeks into a third and so on. This can lead to a huge amount of debt that you might not ever be able to pay back.

Check out the alternatives

Even though a payday loan can seem like a quick way to get help in the short term and relieve some of your anxieties, there are other options that might be better. For example, you might be able ask your employer for a cash advance on your salary. This would be about the same as a payday loan except you would probably not have to pay an excessive fee. You might also be able to get a personal line of credit from your bank or credit union or take on a second job. Both these alternatives would have a lower interest rate than a payday loan and more time to pay back the money.

Consumer credit counseling

You might also consider the option of consumer credit counseling. A credit-counseling agency could help you develop a debt management plan that would probably get you out of debt in about five years. Plus, it would work with your creditors to get your interest rates reduced and your debt payment plan approved.

Do you qualify for debt consolidation?

National Debt Relief
National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
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Moderate National Debt Relief Caller: Misty Transcribed WE 3/28/2021 Misty: The call, it may be recorded. Can you tell me do you recall how you heard about NDR? KYLE: I googled it, and then it went to Better Business Bureau or whatever it's called. And you guys have the highest rating. Misty: Which service did they actually provide for you? KYLE: So, basically, I enrolled all my credit cards into the program. And I stopped paying. And then, the lawyers reached out to the company's lawyers. And they've been settling, stuff like that. Misty: How would you describe your interaction that you had with your representative that you worked with on getting everything squared away? KYLE: Oh, it was excellent. Misty: Do you feel that the door of communication is still open if you have any questions or concerns? KYLE: Yes. Yes, I actually have been meaning to call you guys, too. [Laughs] I just haven't had time, but yeah. Misty: How did NDR work with you on your payment plan? Do you feel that they're flexible if you need to change the date? KYLE: Yeah. Yeah, if I ever had to. I don't need to, but I know that if I ever had to, I can just call them. Misty: What are your thoughts on the cost in relation to the quality of service you've received from them? KYLE: I'd say 10 out of 10. Misty: How has working with NDR impacted your life so far? KYLE: It's helped out a lot. I was really underwater with bills, and now I can breathe. And I managed it a whole lot better. Misty: Have you actually finished the program or are you still working through it? KYLE: Still working through it. I got one more card to settle. Misty: But we're making progress though, right? KYLE: Absolutely. Yeah, I think one of my cards was 17,000. They settled it for 6,000. That was pretty cool. Misty: Are there any other comments or even any suggestions on how they might improve their service for you? KYLE: Well, what I was gonna call them about was just as far as the payments that I make, and is there an actual date as to when it stops at 43 months, or if that was an estimated date? So, I guess I should have gotten more clarification in the beginning. But that's kind of what I had questions about. Misty: Well, that brings us to the star rating, which is 1 to 5. So, how would you rate your experience with NDR at this time, and 1 would be very dissatisfied, 5 is that you would recommend them to a friend at this time? KYLE: A 5. Misty: What would you say to that friend who asked you about it, just maybe one or two things you might tell them before they decide who they're going with? KYLE: That your credit is gonna take a hit, but it's gonna bounce back, and you'd be fine. Misty: Would it be okay if we shared your feedback on ConsumerAffairs.com for others to read it or in a similar point in their life where they're like, “I'm not sure who I need to go with,” but they can read reviews of people that have started the process with NDR? KYLE: Yeah. Is it gonna have my first and last name on the review? Misty: No, sir. Only first name, and we do not publish any contact information. KYLE: Okay. Yeah, that’s fine. Misty: I have kylecunningham1873@gmail.com. KYLE: Yes, ma'am.

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Kyle Cunningham
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