If you can't pay back a payday loan, you're probably worried about the up-coming onslaught of debt collection calls, bank account debits and high fees.But there's a way you may be able to avoid that. A lot of payday loan places belong to an organization, the CFSA. If they're members, there's something they won't tell you about, but if you can't pay back your loan and you tell them this, they have to stop trying to collect and they have to allow you the next four paydays to pay back the loan, and they can't charge any extra fees.
Really. I'm serious. They won't tell you about it, but it's true. Look for the sticker in the office, a little blue oval that says "CFSA," or check the payday loan company's website to see if they're members. Or look at this list to see if your loan company's on it, though the list might not include all the members.
If you're planning to take out a payday loan and have the slightest worry that you won't be able to repay, make sure the company is a CFSA member. (If you have a big worry that you can't repay, don't take it out in the first place, but you already know that.)
If you already have a loan you can't repay, try this anyway, even if the company doesn't belong to the CFSA. There are some state laws that apply, or you might get lucky and they'll agree anyway. You never know. But if the payday loan company is a CFSA member, they have to listen.
You can also check with your state's attorney general website, or search for "extended payment plan" and your state's name, to see what state laws apply. Lots of states, like Utah and Virginia, for example, have websites or brochures about payday loan consumer protection laws. There's a little federal protection, but not much compared to state consumer laws.
What to Say If You Can't Pay
You must do this before close of business on the last day before the loan is due, but don't wait till the last minute. You can do this as soon as you know you can't pay.
Do exactly what you did when you took out the loan. If you walked into the office, walk into the office. If you got the loan online, contact them online. If you really want to cover your ass, when you walk in, carry a print-out of this page or include it as a link if you contact them online.
Say, "I want to apply for an Extended Payment Plan."
That's it. You'll have to sign a new statement agreeing to the payment schedule, which is four equal payments, each due on your next four paydays. They'll include any fees you already owe, but they can't add any new fees or interest, and they can't hassle you or send a collection agency after you, as long as you make the four payments on time.
What's the catch?
There's just one catch: You can only do this once per year at each different payday loan company. That's about it. Or if your state has a law that makes things happen a little differently, they'll have to abide by state law.
If you have other debts to deal with, you may also want to check out services that help you consolidate or cut your debt and improve your credit score.
If it doesn't work
If the company is a CFSA member and they won't agree to an Extended Payment Plan (EPP), make the CFSA get after them. Call the CFSA hotline between 9 and 5 eastern time at 888-572-9329 or email the CFSA at LoanQuestions@CFSAA.com or use the form at this link.
Payday loan companies join the CFSA because they get benefits like lobbyists in Washington and tax deductible trips to conferences in California or Florida. Giving free extended payment plans is the price they gotta pay for all that. It's only fair. Make them pay.
5:58 p.m. January 13
Is this for real? It seems too good to be true.
6:06 p.m..January 13
how do U know if your place is a mebmer?
8:12 p.m. January 13
Like it says, they have a sticker on the door or say so on their webpage. or you can ask.
9:20 p.m. January 13
whats it stand for?
9:39 p.m.January 13
Community Financial Services Association. I've done this three different times. No problem where I live at least. Had to ask for a superviser once becuase the guy never heard of it, but the supverisor just brought out the paperwork. Like PDL says, the employees aren't supposed to suggest it but they ahve to do it if you ask.
9:51 p.m. January 13
9:59 p.m. January 13
PaydayLoner. Writes this blog.
10:33 a.m.January 14
So let me get this straight. You can take out a payday loan with a company that's a member of CFSA and pay the fee of $25 per hundred and it'll be due on your next payday. But if you tell them you want switch to the EPP, they have to agree. They can't charge you anything else, and you have four paydays to pay back. Couldn't you just plan to do that from the start, and get an eight-week loan?
4:45 p.m. January 14
I never said that. Did I say that? I'm going to get in enough trouble already telling you stuff I'm not supposed to, LOL.
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