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Preyed Upon by Payday Lenders? We Can Help!
Payday was still a few days away, and you needed cash. The payday lender ad said that you could get a cash advance on your paycheck. It seemed simple enough. You wrote a check to the lender for, say, $300 and they gave you $255 cash. They will not cash your check until your next payday, and you can spend that $255 advance however you want. The difference between the $45 that you paid and what you got in return is the fee for the “deferred deposit” service.
The whole process seemed really easy. Nobody asked you to produce collateral other than your upcoming paycheck, and you did not have to go through a credit check. All it cost you was $45, and as soon as your paycheck hits your bank account, the debt will be extinguished.
It all seems fair until you look at the enormous amounts you are actually paying, and start wondering if what the lender required as far as a fee is even legal. As payday loan attorneys we can expose the lies you have been told and help you settle your debt as quickly as possible for as little as possible.
The Payday Loan Lie
In California, the maximum payday loan allowed by law is $300, and the maximum fee a payday lender is allowed to charge is $15 of the amount of the check, or $45.
Although it might not seem like much at first, if you borrow $255 on a $300 loan that has to be paid back in two weeks, you are actually borrowing at an annual percentage rate of 460 percent! APR is the total annual interest rate that a borrower pays on a loan, and it includes all fees and charges. When you know the APR, you know the real total cost of borrowing money. Compare that payday loan APR of 460 percent to a car loan with an APR of six or seven percent and you can see how ridiculously high the fees and interest are on that short-term loan. Members of the military get a break if the lender is following the law, but the rate is still high at 36 percent APR, compared to other types of loans.
By law, the lender is required to disclose the APR for your payday loan. They are required to prominently display the APR so you can see it and understand it before you sign on for the loan. Not only is that often not done, but payday lenders also hook people in for renewals and extensions of the original loans without disclosing interest and additional fees and interest. You can get sucked in so deep in this never-ending cycle that you begin to doubt there is any way out, especially in situations where payday lenders are charging usury rates beyond what the law allows. Default rates on payday loans are said to be as much as 20 percent.
McFarlin LLP Can Help You Negotiate Payday Loan Debt
If you have payday loan debt, you may be struggling with other debt as well. Our payday loan attorneys will help you figure out how much total you owe to all your creditors so we can begin negotiating with them as soon as possible.
McFarlin LLP has experienced attorneys that can help you avoid bankruptcy by negotiating a meaningful reduction in your payday loans while also working to settle any outstanding credit card, car loan, mortgage, or any other type of debt with your creditors. We will represent you in court in the event you are served with a lawsuit. Of course if you do need a bankruptcy, we are happy to handle that as well.
Contact the California payday loan attorneys at McFarlin LLP today either online or by calling our Irvine, California offices at 949-544-2640.