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Stay out of further debt-avoid payday loan consolidation scams
Payday loans are a source of funds that may not be easily advanced to borrowers by other types of financiers. However, one may get into a loan trap. This is because it may lead to a series of events that keep one constantly indebted.
The borrower will apply for and get the payday loan. After this, they receive their paycheck, they will then use the money to pay back the entire loan plus the fees. This then leaves them with little finances to cater for their needs, leading them to seek yet another payday loan.
The solution to getting out of this payday loan trap is to get into a payday loan consolidation program. However, as there is a high need for many borrowers to get out of debt, some scams are being operated. Thus, you need to be on the lookout for such scams as they will lead you into further debt.
Your financial position, as well as your personal information, will be put at risk you engage with payday loan consolidation scams. Should the following come up when you are considering using the services of a payday loan consolidation company, you should be more than careful so as to avoid being scammed?
A request for an upfront payment for the services
A loan consolidation scam will often ask for a payment, even before they offer you their services. This is usually a high amount of fees. This is not a normal practice in business as legitimate companies do not ask for an upfront fee even before they offer their services to a client.
The advice that they offer is unethical
If the loan consolidation company directs you to do activities that go against ethical business practices, this is yet another red flag that they are not legitimate. Such advice would be something like you should stop paying off a debt and instead put money into a trust for them.
They ask for your personal details before sending in a quote
Should the interest of the payday loan consolidation company be focused on getting your personal details rather than getting you out of debt, this is another thing to be wary of. The scams will possibly insist on getting your personal information such as your account details or security number even before they send you a quote.
When you are still at the stage of considering their services they provide, the only information that they will need is the lenders that you owe money as well as the total amount of money that you owe. After they have sent in the quotation is when they may need more details from you.
These are just some of the common practices that give away the scams that are operating. Make sure that you do not fall into their trap as this will lead you into further debt. Remember that you should not share personal information nor pay for fees upfront. Also, under no circumstances are you to send the money to a trust. Make a wise choice, keep away from scams and improve your financial position.