Payday Loan Consolidation in Utah

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A Complete Guide to Payday Loan Consolidation in Utah

Utah is one of the worst places in the U.S. to take out a payday loan. Relatively few restrictions are in place to govern the practices of lenders, leading borrowers to face significant financial difficulties. For anyone who has fallen victim to predatory lenders in Utah, payday loan consolidation offers a path to get borrowers back on their feet. 

Payday loan laws in Utah

Utah has some of the least restrictive payday loan laws in the country. There is no limit on loan amounts nor is there a cap on the annual percentage rate (APR). This can result in interest rates in excess of 650% in the state. Additional charges are also not clearly outlined, leading lenders to charge what they wish for fees. Referred to as “deferred deposit loans” in Utah, payday lenders must be licensed in order to legally operate in the state. Lenders must also provide borrowers with all the payment dates, terms, and fees in the agreement. 

The maximum loan term is 70 days with no limit on the number of rollovers per loan. There is also no limit on the number of loans a person can apply for. Borrowers can also be charged a $20 NSF (non-sufficient funds) fee. 

What will happen if you can’t repay a payday loan in Utah

Utah payday loan borrowers won’t face criminal charges or jail time for being unable to pay back their payday loan. That said, lenders can try to bring borrowers to civil court to settle the monetary dispute. Lenders can also contact borrowers through their phone number, email, or mail. Lenders are not required to verify a borrower’s ability to repay their loan, so be wary before entering into an agreement with a lender. For borrowers who think a lender has overstepped their limits, contact the Utah Department of Financial Institutions to file a complaint

What is the statute of limitations on payday loans in Utah?

The statute of limitations in Utah is six years. This means lenders have six years to try and collect the debt via the courts if the borrower is unable to pay back their loan.

How to consolidate your payday loans in Utah

Payday loan consolidation is a way for borrowers to take back control of their debt and come up with a strategy to become debt-free. This strategy, also called credit consolidation and payday loan relief, is a solution where the borrower’s total loan amount is lumped into one loan with a reduced, flat interest rate to deal with. By working with a third-party company, borrowers get their original debt taken care of and no longer have to worry about the harassing lender. In exchange, borrowers will make the new payments directly to the third-party company.

Another option borrowers can consider is to take out a separate loan that you would use to pay off your other loans. Borrowers will get their debts grouped together with a single interest rate with this method. However, this choice has its drawbacks. Another loan could have a higher monthly payment, it could be subject to additional fees and penalties, and borrowers run the risk of taking on even more debt. If you choose to go this route, make sure that the new monthly payment is realistic for your budget. It will not help in the long run if you miss payments, which will trigger late fees and could potentially cause you to pay a higher interest rate.

A debt management plan (DMP) is another method borrowers can pursue. A DMP rolls all of your loans together into a single debt to pay off with a lower interest rate. This is similar to the payday relief option mention above, except in this case the borrower works directly with the lender (usually with the assistance of a nonprofit credit counseling service) rather than a third party. The borrower simply consolidates their original loans with this plan and works to pay them back all at once. 

By the numbers: Payday lenders in Utah

  • Max loan term: 70 days
  • Average loan amount: $382
  • Maximum loan amount: No limit
  • APR Cap: None, average is 658%
  • Number of payday lenders in Utah: 46
  • Average 14-day payday loan APR: 658%
  • Collection fees: No limit (determined by the lender), $20 NSF fee
  • The poverty rate in Utah: 8.9%

 

 

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How can I get help paying my payday loan in Utah

Falling into a debt trap with payday loans in Utah can be extremely overwhelming and stressful. What was once a quick, short-term loan has suddenly spiraled out of control into what feels like a never-ending nightmare. For borrowers looking to escape their payday loan scenario, seriously consider one of the payday loan consolidation methods mention above. It can be the first step toward getting your finances back on track. 

Utah Department of Financial Institutions

324 State St #201

Salt Lake City, UT 84111

Phone number: 801-538-8830

Additional state resources to utilize: 

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