How to Get Out of Payday Loan Hell

It’s bad enough getting into a payday loan in the first place. But even more fun is involved if you are unable to pay back your payday loan. Most companies keep piling up interest and late fees, making it tough to repay the loan. A reader recently wrote of her experience paying back a horrendous payday loandebt. It was very inspirational, a true example of being an assertive, informed consumer. She avoided all add-on late fees and was able to pay it off. It pays to read (and also not to do payday loans in the first place).

I got involved in a payday loan and it looked like I would never get out of it. Until then, I was going to continue to keep paying all these extra fees. I started reading the terms and conditions of the contract that I signed. It specifically said in the terms that if I defaulted on the loan, that it would go into arbitration after 60 days. Now if you pay on the loan bi-weekly, that means you have 4 paychecks to pay it off. Not just that but if you stopped paying on the loan, it is ILLEGAL for them to continue adding the ballooned interest unless you sign another contract agreeing to it.

With this knowledge, I STOPPED paying my loan. I then sent them a letter stating that I refused to pay their interest anymore since I was no longer able to keep up with it financially. I told them that I would be making payments to them every 2 weeks until the loan was paid. I also included a Cease and Desist clause in there since I was making a payment plan which was satisfactory to my situation. Then every week I made sure to send a payment in the form of a Cashier’s Check until it was paid. I never heard a word from them and the loan was paid in full without a single phone call. At the end I did receive a letter from them thanking me for paying the account in full and that was it. never paid a penny more in interest or anything.

So if anyone is stuck in a never ending student loan and wants an out to the nightmare, You can send them a letter using the information at the bottom of this post. Just make sure you look at and clearly understand the terms of your loan.

The magic letter:

I am presently going through some financial difficulties and fear that I must amend the amount to be re-paid on my current contract. Payments will be made regularly until the debt is paid in full. As a reminder, the debt will be paid within the 60 days the contract requires before any collection attempts can be made by your agents. Any attempts to place negative information on my credit report before that time will be met with legal remedies. Enclosed you will find a cashier’s check in the amount of $100 to be applied towards the balance of the debt as an act of “good will” that I intend to satisfy this debt.

At this time I also request that all communications Cease and Desist in regards to this debt. This is a notice that any phone calls from employees or registered agents of PLS to my place of employment, home phone, and references are to stop. My schedule makes it impossible to be available to receive phone calls during normal business hours. Be advised that any phone calls received in regards to this debt, will be recorded and by doing so after receiving this letter will be considered an acknowledgment of their agreement to being recorded.