California is drowning in debt and in desperate need of legitimate debt relief services. It ranks third on the national cost-of-living index, but it’s ninth on the ranking for per-capita income. To combat rising debt, California’s raised the minimum wage to $15 per hour, but considering that the average resident has over $5000 in credit card debt and that the delinquency rate is over 10%, it seems like $15 is a drop in the ocean.
Enter payday loans. You need money, and you need it immediately. Your credit history isn’t great, and you don’t qualify for a personal loan. Payday loans, with immediate access to money and no credit checks, sound perfect. Unfortunately, that isn’t the case. You get money immediately, but with interest rates in excess of 350%.
California regulates payday lenders as far as possible. The loan amount is limited to $300, and lenders can’t charge more than $45 in fees. However, online payday lenders can bypass state-specific regulations and offer loans for much higher amounts, and set their own interest rates, which can go up to 1000%.
Credit Card and Payday Loan Debt in California
Payday loans are supposed to be regulated by the Department of Financial Protection and Innovation (DFPI). However, it’s difficult to regulate an industry that operates online in contravention of the rules. For example, in California, the maximum interest payday lenders legally charge 15%. An online payday lender can charge anything from 350% – 1000%.
One of the ways in which payday lenders dodge interest rate laws is by charging the maximum allowable interest and inflating upfront fees to a level that is equivalent to 500%.
Californian law allows a single loan at a time of up to $300 for a period of time that is no longer than 31 days. Online payday loan providers simply bypass these rules.
Are Banks Complicit in Abusive Practices?
Banks have been criticized for contributing to the payday loan crisis. Banks deny many loan applications due to their strict qualifying criteria, especially regarding credit records. This usually discounts people who need loans the most, forcing them to resort to payday loans.
California and other states are working hard to put an end to the financial abuse financial institutions and payday lenders inflict on borrowers. It’s hoped that political and legal action will change legislation governing all financial service providers, including online lending agencies.
Until then, debt relief programs continue to provide invaluable financial assistance to those overwhelmed by personal and credit card debt.
Your Debt Relief Options In California
There are other options for people who are in a bind and need immediate debt relief solutions. Federal credit unions offer loans that are competitive with payday loans but without the interest. There are also lenders who want to help people with muddy credit reports and they are far more ethical than payday companies.
There are even cash advance apps for people who need help managing their money responsibly.
One of the things you can do is talk to your credit card provider about a cash advance. The interest rate will be high but not nearly as high as 1000%.
You should visit the California Department of Social Services website because it contains a list of available cash assistance and credit card debt relief programs.
Apps and Online Loans To Help You Avoid Credit Card Debt
Earnin is an app that works like a payday loan in that you can borrow against your paycheck. Initial transactions are limited to $100 per pay period, but the more you use the app, the more you can borrow. Unlike a payday loan, you don’t pay any fees or interest, although you are welcome to “tip” the app when your loan is paid.
NetCredit is an online loan provider that provides credit to people whose credit scores are slightly tarnished. Interest rates are high – it’s a risky market, after all – but not even close to the exorbitant rates charged by payday lenders. There are no fees for Californian residents, but you will be charged a $15 late fee if you are 15 days over the time period.
MoneyLion provides credit-building loans. You can get small loans up to $1000 on the app. Sticking to a payment schedule enables you to start building good credit. The drawback is that you need to join MoneyLion to qualify, and the monthly fee is $19.99.
Californian Cash Assistance Programs
You needn’t go digital to get debt relief. There are plenty of other assistance programs in California, some of which include:
- Homeowner Assistance Program
- Water Bill Help
- Cash Aid
- Rental Assistance California
- California Alternate Rates for Energy (CARE)
Choosing The Right Debt Relief Solutions For You
One of the most important decisions you’ll make regarding your financial situation is which debt relief service provider you’re going to use.
Your financial health is on the line, but more than that, your family’s wellness is also at risk. Consider the following criteria before you make your final decision.
Alleviate Financial Solutions: Getting Debt Relief Services In California
Alleviate Financial Solutions is a certified debt relief company in California. Our debt experts are skilled negotiators who can reduce your debt balance so that you can pay creditors more quickly. We offer a one lower monthly payment program that teaches you how to manage your debt and budget to avoid future debt.
Make us your first choice when you’re looking for a California debt relief company with a proven track record and a client-centric approach. Complete our onsite contact us form or call (877) 879-4905 to start your journey to a debt-free life.