In March 2015, Consumer Financial Protection Bureau (CFPB) declared that it would like to implement new rules to save borrowers from the abusive tactics of the predatory lenders.The proposed rules would make it necessary for the payday loan lenders to determine if a potential borrower can pay off the loan in future - including principal amount, fees, interests, etc.While this can be difficult to get approved, as many borrowers may not have the best credit scores or ratings, if you are successful this in effect will work like a standard debt consolidation loan.
However, the term “debt consolidation” may refer to at least two different things.
Payday loans can also cause problems with cash flow management due to the automatic ACH payment structure. As a result, payday loans often lead to NSF (non-sufficient fund fees) and account overdrafts.
Problems with payday loans usually arise when the borrower fails to pay back the full amount borrowed within the first payment cycle.
We sometimes get asked about payday loans and debt consolidation.
Payday loans are short-term loans where an individual can borrow funds needed to cover unexpected expenses until the date of their next paycheck.