COVID-19: How Payday Lenders May Help You Stay Financially Stable
Our city, county, state, and federal governments are working as quickly as possible to address the growing threat of the coronavirus (COVID-19). A number of states have virtually shut down to try to limit the spread of the virus. Only essential services are still active. Most notably, California and New York, but there are many others either requesting or requiring limited activities and travel.
These steps are really required to try to reduce personal exposure, but they bring great uncertainty for many people, many of whom are finding them out of work with no prior notice.
There are steps you can take right now to try to limit the impact on you and your family. First, if you expect you will have trouble paying bills or loans (like an auto or home loan), there are options to consider.
Contact your lenders and loan providers
Contact lenders and loan providers and let them know about your sudden job loss or layoff. Our government is encouraging financial institutions to work with their customers to alter their payment options or extend their next payment due date. Credit card companies can also offer you options that may help you. This could include a delay or skipping of some payments.
When contacting any creditor, explain:
- Your situation
- How much you can afford to pay
- When you’re likely to be able to restart regular payments (if you have any idea)
- Your income, expenses and possibly assets you have
If you believe you will have trouble making your auto loan payments
Your lender may have options to consider. These may include changing the date of your next payment, a revised payment plan, and a payment extension plan.
If you have student loans
You may be able to get a delay or reduction in your payment program. With all loans, even if you get a delay in your payments, remember that your interest is still accruing or being added.
And the federal government has delayed tax filings from April 15th to July 15th, so you don’t have to worry about coming up with that money right now.
What to do if you lose your income?
The number one thing to do is to file your unemployment claim immediately. There is always a short delay before you start receiving your checks, so you should drop everything to get this done. Every state has unemployment benefits, and there are some variations in their programs.
You can go to your state’s website to review effective policies as well as identify your benefit options.
How are lenders helping payday loan customers?
If you have a payday loan, treat it the same as any payment you need to delay or suspend. Call your lender directly and explain the situation. Many payday lenders are working with customers to find solutions that fit this once-in-a-lifetime circumstance.
Be especially aware of any potential scam attempts
Whenever there are tough situations, the scammers come out of the woodwork looking to take advantage of anyone they consider vulnerable. Ignore all emails, texts, or social media posts that are selling fake products or services about the coronavirus or any financial 'product.' Legitimate lenders do not contact people in this way, and they never request any money upfront. Anyone claiming to be a lender asking for money is just a thief.
Tips for older adults (retirees looking for payday loans)
Scammers often target older people because they may have income like retirement benefits, savings, or social security or disability benefits. The coronavirus is much more dangerous to elderly people, so they may be susceptible to scam artists.
One last thought, if you can consolidate outstanding debts into 1 loan with a low-interest rate, you may be able to lower your monthly payment and be in a better position.
It is not recommended you get payday or installment loans that are small but have high fees and fast payback time frames. These will not help you to carry over long enough to get through the coronavirus emergency.
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