Don’t Know if You Have Outstanding Payday Loans? Here’s How to Find Out

According to pewtrusts.org, twelve million Americans take out payday loans each year, spending $9 billion on loan fees. On top of that, the average payday loan borrower is in debt for five months of the year, spending an average of $520 in fees to repeatedly borrow $375. The average fee at a storefront loan business is $55 per two weeks.

You may be one of those twelve million who thought you paid that pesky payday loan off. Here’s how to find out if you still have any outstanding payday loans.

Ask your payday lender

This is the simplest way to find out is to call your payday loan company and ask. You will need to provide your personal information.

Checking your credit report is also another way to discover if you have any outstanding loans. Although payday lenders don’t report to the “big three” credit reporting agencies (Experian, Transunion and Equifax) unless something is in default or collections, there are secondary third-party databases that you can check which provide non-traditional credit data.

Use the statewide database

Veritec is a database that provides this type of non-traditional credit data. They are a third-party database system used to determine loan eligibility. It helps lenders meet their state lending laws and protects consumers who are taking out loans.  There are 13 states that participate in this statewide database maintained by Veritec. The participating states are: Alabama, Delaware, Florida, Illinois, Indiana, Kentucky, Michigan, North Dakota, Oklahoma, South Carolina, Virginia, Washington and Wisconsin.

Only a legal payday lender has access to the Veritec database. However, if you live in one of the 13 states, you can contact the provider directly.

How to access the database

While Veritec is only available to payday lenders, CoreLogic Teletrack allows borrowers to access the information compiled in their database. Teletrack is a consumer reporting agency that provides consumer reports to third parties for the purpose of credit risk assessment and/or other purposes as permitted by law. It is a subsidiary of CoreLogic, a leading Specialty Consumer Reporting Agency (“CRA”) that provides non-traditional credit data and insights to the alternative financial services industry. In addition, a borrower can apply to have the information corrected if a loan application is denied based on incorrect information included in the database. 

Teletrack collects consumer information about and provides data to payday lenders, rent-to-own businesses, furniture stores that offer financing, auto finance and leasing companies, high risk consumer finance businesses, subprime home lending businesses, subprime credit card issuers, banks, credit unions, cable/telecom companies and debt buyers/collectors.

You can request a report through CoreLogic Teletrack.

  • The company will provide one free report every 12 months if you request it.
  • The company will freeze your consumer report if you request it.
  • Requesting copies of your own consumer reports does not hurt your credit scores. 
  • Companies required to provide the information in your report for free annually upon request must do so within fifteen days of receiving your request.

Print out the report and complete it. Suppose you find information in your consumer report that you believe is inaccurate or incomplete. In that case, you have the legal right to dispute the report’s content with the consumer reporting company and the company that shared the information to the reporting company, such as your lender. Under the FCRA, companies must conduct – free of charge – a reasonable investigation of your dispute. The company that has provided the incorrect information must correct the error and notify all of the consumer reporting companies to whom it provided the inaccurate information.

Call the number below to report any errors.

CoreLogic Teletrack will provide the following information:

  • The number of payday loans a borrower has applied for and paid off
  • Any and all late or defaulted payments
  • Charge-offs
  • Any records of bankruptcy filings

Want to know more about how to request your Corelogic Teletrack report? Check out this video:

Do this if you don’t live in one of the 13 states covered by the database

Check your credit reports. There are three major credit bureaus: Equifax, Experian, and TransUnion. There are also a number of smaller companies, including a few that focus on payday loans such as FactorTrust, Clarity Services, and DataX.

FactorTrust collects loan performance information on nonprime consumers to provide predictive credit data, analytics and risk scoring solutions to short- term lenders, installment lenders, nonprime auto lenders, leasing companies, and other subprime credit providers. FactorTrust is owned by TransUnion.

Clarity Services is Experian’s real-time credit bureau that covers alternative financial services and buy now pay later products and data. They collect and provide information on payday loans, installment loans, auto loans (and leasing), check cashing services, rent-to-own transactions, telecommunication account openings, and financial services with an emphasis on the lower-income and subprime consumer market segments.

DataX collects data on non-prime consumers and those with thin credit files. It was created to uncover creditworthy non-prime prospects by looking beyond traditional credit reporting. DataX uses alternative payment types (checks, cash, money orders, ACH, etc.), including full header, tradeline, performance and payment data. This is owned by Equifax.

Other agencies include Certegy Check Services, ChexSystems and Innovis. 

Certegy Check Services collects check writing histories and provides check and ACH verification services for retail merchants and gaming establishments that accept checks as payment.

ChexSystems is a banking reporting agency that collects information about your previous problems with deposit accounts, including checking and savings accounts. They maintain a report of your banking activity, which banks and credit unions can use to determine eligibility for a new checking or savings account.

Innovis provides credit, identity, and authentication solutions designed to manage risk and empower consumers and customers to achieve their financial goals. They are a credit reporting division of CBC Companies and is considered the fourth largest consumer credit reporting agency in the United States, after Experian, TransUnion, and Equifax.

All of these agencies must adhere to the guidelines established by the Fair Credit Reporting Act. And all of the bureaus are required to provide a free copy of your credit report once a year. It’s important to review them to ensure you have no outstanding loans you may have forgotten about.

How long does a payday loan stay in the system?

Payday loans don’t work the same way as traditional loans. If you have no delinquencies and are paid up in full, chances are there will be no record of the loan because payday lenders do not usually report to the credit bureaus, so they are unlikely to impact your credit scores. 

But if you have an overdue installment loan, accounts considered “not paid” or “in collections” will get reported to the three credit bureaus and generally remain on your file for up to seven years.

Traditional loan records are usually kept for 6 to 10 years and are reported to the three large credit reporting bureaus.

What should I do if I have outstanding payday loans?

Pay them off as soon as you can. Because of the extremely high interest rates, the fees and interest can add up quickly. In general, prioritizing the debt with the highest interest rate will save you more money and allow you to redirect funds to other financial goals faster. 

And since payday loans are short-term loans for a small amount — typically $500 or less — that’s meant to be repaid with the borrower’s next paycheck, it shouldn’t take as long to pay off, unlike credit card debt. Prioritize this type of loan, and pay it quickly. If you have to roll it over into a new loan, you’ll end up paying more each time and could end up trapped in a cycle of debt. More than 90% of payday loan borrowers regret their original loan, and payday lenders are so predatory that the loans are illegal in many states.

If you have more than one loan to pay off, it’s important to develop a strategy, like paying the loans with the highest interest rates first. For example, paying off a payday loan with a 600% APR can save you quite a bit of money over paying off a personal loan with a low interest rate.

Stuck in payday debt?

DebtHammer may be able to help.

Other alternatives if you can’t pay 

As in everything in life, there are choices. Here are a few sound choices to pick from before deciding not to pay off that expensive payday loan. We’ve even included more in-depth articles to help you decide which is the best fit for you.

  • Cash advance apps: These apps, like Dave and Brigit, will loan you small amounts of money until your next payday. They don’t charge interest, but may charge a small monthly fee and request an optional tip.
  • Payday alternative loans: PALs are very similar to payday loans, but there’s one big difference — instead of payday lenders, PALs are given out through federal credit unions, making them much more affordable.
  • Credit counseling: Credit counseling agencies can help you put together a debt management plan. The agencies are mostly nonprofit, but there will be a small monthly fee associated with the plan.
  • New loan: A debt consolidation loan is a personal loan that you then use to pay off all of your other debts, leaving you with one monthly payment, ideally with a lower interest rate.
  • Ask a friend or family member for help: Ask a few if you must. Borrow small amounts from each if that’s what it takes. Some people can spare a couple hundred dollars, and many of them have likely needed help in the past. There’s no reason to be embarrassed, considering that 27% of Americans have no emergency fund.
  • Pick up a lucrative side gig like animal sitting, driving for a ridesharing service, or even selling unwanted items online. If you need to earn some quick cash, you have a few options.

The Bottom Line

The average American is saddled with about $90,000 in debt including auto, home, student, credit card and personal loans. Debt is a serious issue.

Aggressively paying down this type of debt should be a priority, as well as accomplishing other personal finance goals. However, attaining this new sense of peace by being debt free simply supersedes the math.

FAQs

What happens if I can’t repay my payday loan?

Defaulting on a payday loan can lead to hefty late fees and penalties. Some other unwanted side effects are aggressive collection calls and threats, damage to your credit scores, a possible court summons, wage garnishment, property seizure and other liens against your property; and worst-case scenario, jail time if you ignore the summons, but not for the non-repayment of the loan itself.

What is deferred presentment?

Payday loan or deferred presentment transaction is a transaction in which a cash advance in whole or in part is made in exchange for a personal check or authorization to debit a deposit account. The amount of the check or authorized debit equals the amount of the advance plus a fee. The person making the advance agrees that the check will not be cashed or deposited or the authorized debit will not be made until a designated future date. This type of transaction is often referred to as a “payday loan,” “payday advance,” or “deferred deposit loan.”

Do I need credit counseling?

If you are filing for bankruptcy, you must get credit counseling beforehand. A person who files for bankruptcy must take two educational courses before receiving a bankruptcy discharge wiping out qualifying debt.
If you are not planning on filing for bankruptcy but want more control of your finances, then credit counseling may be the right path for you, which consequently will help you avoid bankruptcy. And if you choose to participate in debt management programs, debt settlement or debt consolidation, it is wise to allow a 3- to 5-year window to complete the program and eliminate debt. Whether debt relief or bankruptcy is your best option will depend on several factors, and credit counseling can help you answer those questions.

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