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Payday Loan Consolidation Scams
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Payday Loan Consolidation Scams

With the increase of people using payday loan companies as a short term solution for a financial emergency – more and more people are getting caught in what is known as the payday loan trap.

And the trap is having too many loans. People get more than one loan – usually they get another loan to pay off an existing loan and the cycle starts as they end up doing this over and over again.

Once they find themselves in this trap many people start seeking help from a payday loan consolidation company – and things can go from bad to worse because there are plenty of payday loan consolidation scams out there.

To avoid these scams here are some red flags to be aware of:

1) The company asks for a very high upfront fee for their service, if they do simply find another company. No legitimate company can ask for an upfront fee, they have to provide you the service first.

2) You get some unethical advice. Hey I get it people are desperate and these companies know it so if a company tells you or advises you of something that sounds sketchy – for example to stop paying your debt so you have that money to put into a trust account for them – run far and run fast from a company like that.

3) Are they asking you for a lot of personal information before giving you a quote?

Is the company asking for your social security number, account details maybe some other personal info? If so again say good bye to them.

A company does not need to know all that information prior to providing you with a quote for their service. They just need to know the total amount of the money you owe and too who.

To avoid getting scammed by a consolidation company you need to do some homework about the company.

So here's what you should do before you get involved with debt consolidation company.

1) Check out the company’s history – check out their record of successful debt consolidation. A company that has a good track record will be telling everyone and so will their customers.

2) Has any consumer lodged a complaint about the company? A lot of complaints is a definite red flag.

3) Check and see if the company has any customer testimonials. All companies want to brag - and the best people to do the bragging for them are satisfied customers.

4) Put the internet to work for you – do some research – look for reviews and such online. You can even go one step further - if you find a review see if you can contact the reviewer.

Being in debt is no fun at all, especially if you’re feeling the pressure from a payday loan company. But jumping in bed with the first payday loan consolidation company without doing a little homework can get you in more trouble then you bargained for.

I know it may be hard but you need to take a deep breath and slow down and take your time researching the company you’re considering to have consolidate your debts. A few minutes or hours of work can and will save you from adding to the stress you’re probably already under.

There are a lot of legitimate companies out there that what to help you – you own it yourself to take the time to find such a company.

Street Talk

Hi Leo, Thank you for another great article. I found it very infomative.

  about 1 decade ago
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