In today's tough economy where a lot of people are in need of financial assistance and too many predators take advantage of their desperation, it is nice to know there are businesses that can offer assistance.
Payday loans have become a $40 billion industry where over 23,000 lenders trying to foster the idea that they are helping out cash-strapped borrowers by offering a payday cash loan when in fact the help really comes from people like Ryan Phillips of Relief, LLC, debt solution and loans consolidation specialists who know the ins and outs of settlement laws and negotiations and work with lenders on behalf of borrowers to stop harassing phone calls and get a fair and equitable settlement.
I caught up with Ryan at his offices in Sherman Oaks, a suburb of Los Angeles, and here's what he had to say about payday cash loans and Relief, LLC.
DH: What is a payday cash loan?
RP: Payday Cash Loans are basically short-term, high interest loans. They are usually obtained from either a walk-in storefront or from a company on the internet. Most people get these high interest loans when they need help tiding them over to their next payday.
DH: Aren't they a good thing in today's economy?
RP: This is a difficult question. I believe there is a legitimate use for payday cash loans if used responsibly. For example, if someone needs money to temporarily hold them over until their next payday and they are 100 percent sure they will pay the loan in full at that time, using this service would be less expensive than bouncing a check or an automated payment.
However, too often when the paycheck comes, people would rather pay only the interest and keep the rest of the money. Before they know it, weeks, even months have gone by and all they've paid is interest payment after interest payment. The problem is that payday lenders bank on the fact that most people won't pay the loan off quickly. I think this plus the lack of regulation in the industry, especially with internet lenders, means that people are often given loans they should not be given.
We see clients that have 15 or 20 payday cash loans totaling over $10,000. We see people who spend almost their entire paycheck just on interest fees to payday lenders. Obviously this can only go on for so long before the person needs to declare bankruptcy. So without some type of regulation to ensure that people do not get in over their heads then this type of behavior by payday lenders will likely continue to contribute to the current crisis of giving out too much credit.
DH: What would you recommend instead?
RP: I would say try borrowing money from family or friends, if possible. I know this can be emotionally difficult, but friends and family won't get you further in the hole.
For those who don't have friends or family they feel they can ask, maybe their employer can give them an advance. It is in the employer's best interest because financial worries can cause stress both at home and on the job.
The most important thing is to be really honest with yourself about how much you owe and when you can pay the loan back -- then weigh your options.
DH: What can borrowers do if they get caught in the payday cash loan cycle of debt?
RP: That is exactly why Relief, LLC was created. We wanted to help educate people and to be an advocate on their behalf when they find themselves caught in this trap of getting one payday cash loan after another in an effort to pay each previous loan off. At Relief, LLC we get into serious negotiations with payday lenders to give the borrower a little breathing room and to give them some time to get their loans paid off. When and where possible we also get them a settlement on the loan to save them money. This is the essence of our loans consolidation program.
DH: Can't borrowers just end the cycle on their own?
RP: Of course, but it is very stressful to try and deal with professional collectors, especially the payday lenders who have structured their companies to be tough with people who don't pay.
And think about it. The borrower is already stressed about not having the money to pay and now they have to deal with the frustration and muster the energy to haggle and negotiate with collectors; collectors who are trained to find any angle to bully, push and work the borrower until they feel they would be better off finding a way to pay just so they don't have to talk to the collector again. Now consider that the borrower probably has five or ten of these loans. It makes it very difficult.
DH: So how are the services of Relief, LLC, different from other payday loans consolidation companies?
RP: Exceptional customer service. We truly care about our clients and want to help them out of their financial stress.
If our clients are being harassed by a payday lender we respond immediately to get collection tactics stopped. Plus we have an excellent track record of getting payday lenders paid off quickly. A lot of other companies don't even pay the lenders until the end of a client's program which can be 6, 9 or 12 months long. This can make things very stressful for the client in the meantime. And we've been told we offer some of the lowest rates compared to our competitors.
For all these reasons our reputation as honest, caring and professional experts in getting payday cash loans resolved continues to grow.
By Deborah S. Hildebrand