How to Get Out of High Interest Payday Loans Legally

You know that payday loans are a bad idea. They’re expensive and they trap people in ways that are hard to get out of. Even if you’re telling yourself not to take another payday loan, you can’t help but get one again when the money becomes tight. That’s because payday loans seem like such an easy fix when you need money quickly.

The problem is you keep getting sucked back into the vicious cycle of debt and you can’t see a way out. You’ve been struggling to get out of payday loans for years now but month after month, it feels like there’s no hope left – but that’s not true. There are ways to stop payday loan payments once and for all.

In this article, we’ve put together a guide on how to stop payday loan payments so you can finally break free from this cycle. Our goal is to help you achieve your financial goals, get out of debt, and avoid future financial problems.

Here are 7 ways that you can check out if you want to stop payday loan payments fast!

1. Inform Your Bank That You are Revoking ACH Authorization

Who is this for?

If your payday lender is automatically debiting your account every month

If your problem is about how to prevent payday lenders from automatically taking money from your account, then you can try this advice.  When you borrow money from a payday lender, the lender may have asked you to sign an ACH (Automated Clearing House) authorization. This authorization gives them the permission to automatically debit or withdraw from your account on your payment due date.

While you can also inform the payday lenders to stop the automatic payments, there are payday lenders who will continue doing so. It is then better to inform the bank that you are revoking this authorization that you granted the payday lender. 

Once you revoke, the bank will be required to stop issuing automatic payments to the payday lender. You  can do this request over the phone or for documentation purposes, you can use this sample letter from the Consumer Financial Protection Bureau (CFPB) when revoking ACH authorization.

2. Issue a Stop Payment Order

Who is this for?

If you want to stop the payments without revoking ACH authorization.

Another way to stop the automatic payments from your account without necessarily revoking ACH authorization is to issue a “stop payment order”. You have to inform your bank about the stop payment order at least 3 days before the payment is due. You can request stop payment either by telephone or you can also use this sample letter from the CFPB. Take note that banks usually charge a stop payment fee.

3. Ask for an Extended Payment Plan

Who is this for?

You want to pay the loan but you need more time to settle the debt.

A payday loan is designed to be a short-term loan that you should pay within 15 to 30 days. However, most people are unable to pay the amount on time. Most payday lenders will recommend that you “roll over” the loan. Rolling over the loan means delaying the due date by paying a fee.

The problem with rolling over payday loans is that you end up paying fees and interests every month without really paying back the original debt amount. If you are unable to pay your fees, these amounts will pile up and you’re left with a more sizable debt than what you started with.

Instead of falling into this trap, ask the payday lender to allow you to pay your debt using an EPP or Extended Payment Plan. Payday lenders that are members of Community Financial Services Association of America (CFSA) usually have this option.

In an Extended Payment Plan, you will be allowed to pay back the loan in smaller installments over a longer period of time. This is much preferable because it gives you more time to find or earn the money without having to take another loan that you have to pay in two weeks’ time. Under an EPP,  you will be allowed to pay the total loan amount in equal installments over a longer period (ex: 60 days). This way, you are actually paying off the money you owe rather than just paying the added fees/interest every time you miss the 2-week due date. 

4. Find an Alternative Source of Funds with Lower Interest Fees

Who is this for?

You are qualified for other loans or credit products with lower interest fees

If you are eligible to get another type of loan with a more preferable interest rate, then this might be a better option for you rather than rolling over your loan again and again. The very short amount of time allowed by payday loans for you to pay back what you borrowed works against you as the borrower because most borrowers won’t really be able to find the money to pay back that amount.

If you can get an installment loan with a lower interest rate or borrow against your credit card, then you can use this money to pay back the payday loan in full. This is better because the next month, you won’t have to pay new fees, instead, you’ll start paying fixed monthly amounts that lessens your loan amount.

For example, you can find emergency loans for the unemployed that will allow you to borrow money and pay it back in installments (3 months to 12 months or more). Use the money to pay off your payday loan and the next month, what you’ll have to pay is the installment loan for an extended period.

5. Pay Off the Loan by Looking for Extra Income Opportunities

Who is this for?

You want to pay the payday loan but you don’t want to get another loan to pay for the amount.

If you are looking for a surefire way on how to get out of a payday loan nightmare, the best method is to pay it off. But what if you are not eligible for any other loan with better rates? Don’t worry because many people who take payday loans are in the same boat. Maybe the reason why you resorted to payday loans in the first place is because that was your only option.

This does not mean, however, that there’s no way out of your debt. Since payday loans are usually $500 or less, you can find ways to earn extra income so you can pay your payday loans. There are many side hustles that you can find that will pay a decent amount of money. 

Here are some links to show you how to earn $1,000 fast and 25 high-paying part-time jobs that you can explore. Getting a source of extra income can also help you earn quick cash instead of turning to payday loans the next time you’re short of cash.

6. File a Complaint

Who is this for?

You believe that the payday lender is overcharging you, if you’re being asked to pay added fees that are not within your original agreement, or if you were not informed of the fees when you took out the loan.

A lot of people are wondering whether it is possible to get government help with payday loans. Is there a way to find payday loan debt assistance from the government? If you have a payday loan that you cannot pay, the government does not have a specific program to help you get out of it unless you file for bankruptcy (which will be discussed in the next section). However, there are actually state laws that protect consumers from being exploited by payday loan lenders.

Depending on the state that you live in, you can find out what laws are in place regarding payday loans. These laws will usually indicate maximum loan limits, loan terms, and finance charges allowed by the state for payday loans.

If you believe that the payday lender is charging you unreasonable fees or refuses to work with you on a payment plan, you may be able to file a complaint with the CFPB. Again, the resolution will depend on the laws in your state. Here is a quick summary of State Statutes Regulating Payday Loans as summarized by the National Conference of State Legislatures.

7. File for Bankruptcy

Who is this for?

You don’t have any other options to pay back the debt and you want to get rid of your payday loan debt completely.

If you can’t afford to make your payments on payday loans, bankruptcy may be the solution. Filing for bankruptcy automatically halts any collections processes initiated by creditors. This is called an “automatic stay”, which means any creditor listed in the petition must cease collections activities such as phone calls or letters trying to collect money owed by the debtor during your bankruptcy proceedings.

In a Chapter 7 bankruptcy, you may be able to discharge your payday loan completely. A payday loan is considered an “unsecured loan”, meaning you can borrow money without a collateral. A Chapter 7 bankruptcy considers unsecured debts as low-priority debts and if you can prove that you don’t have the means to pay them off, they can be erased and you don’t need to pay them off. 

A Chapter 7 bankruptcy is then an option if you want total payday loan forgiveness. Take note, however, that there are pros and cons of filing for bankruptcy so you should only do it as a last option.

Stop Payday Loan Payments Forever

If you want to finally get out of paying astronomical payday loan fees and charges, you can follow the tips listed in this guide so you can close off your payday loan. If you are having a hard time managing your finances, it might also be beneficial for you to consult with a debt management specialist.  A good place to start is to look online for such services (often free or at minimal cost) with

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