Payday loans can entice you into a debt trap because of high costs. It is easy to rely on these loans, and you may even be able to “roll on” a single loan repeatedly to delay repayment. But easy access leads to an expensive habit, and the money you are now spending these loans will prevent you from getting back on your feet. You can use different ways to get rid of payday loan debt. We will detail these strategies below and discuss ways to prevent the problem from coming back.
- Repay the loan with new, cheaper credit.
- Repay the loan with savings.
- Arrange an extended repayment program with your current lender.
- Temporarily increase your income to eliminate the debt.
- Get a different loan
If you are not able to repay the loan at this time, a different loan can make it easier to get out of debt.
Consolidate Debt: Any other loan will be more affordable than a payday loan, so try different sources of money. Small community banks and credit unions are your best bet for getting approved, especially if you have bad credit or have never established credit. Some online lenders also meet the needs of borrowers with less than perfect credit. That said, every time you search for lenders who market to “bad credit” borrowers, you run the risk of using predatory lenders.
And here, you can start with Payday Loan Consolidation Company. It is one of the best alternatives to recovering these kinds of bad debts.
Get help with approval: If you cannot get approved, consider asking someone with good credit to co-sign for the loan. This person will basically guarantee that you repay on time. If you do not, your co-signer will be 100% responsible for paying this loan, so it is a huge liability and risk for that person. A co-signer credit will be damaged if the payments are late or in case of default on loan, and the lenders may sue the co-signatories.
When times are tough, and you are unable to pay off payday loans, contact your lender and inquire about your options. Some lenders offer more extended payment plans and other forms of short-term relief. The “Perfect” lenders, including most of the significant chunk and mortar repair stores that you see along busy streets, belong to the Community Financial Services Association of America (CFSAA), which has guidelines for setting up payment plans.
Sometimes finding more money in the budget is your only option. There are two ways to do this: earn more income or reduce expenses. Neither is easy, but they are both instrumental.
Increase income: If possible, find extra work. You do not need a permanent job that you hustle in the short term to get out of any existing payday loan debt. Working more is probably the last thing you want to do, especially if you are already scattering. But think of income more than the salary you earn. It is also money that you avoid spending on many payday loan fees. This income can make the difference between debt and spiral back on your feet.
Selling things: You can also bring cash by selling goods. As extra work, it’s not fun, but it’s better than paying the finance charges. If you work more is not an option; this could be your best option to increase the money quickly.
Cost reduction: If you take cash, not an option, you will have to reduce expenses until you are back on top of your finances. It means cutting bare bones. Initiate every meal yourself and take your lunch to work. Decrease avoidable costs like cable, and find inexpensive ways to be entertained.
Prepare for the future
Once you are on your feet, you want to avoid going back to payday loans. You can do this by building a solid financial base.
Set up an emergency fund so that you have cash when you need it. Start by setting aside a few hundred dollars, then build it up to a thousand. Finally, you should have three to nine months’ worth of living expenses in cash, which should cover most of the surprises of life. But now start small and work your way.
To obtain affordable loans in the prospect, you need good credit. If your credit is poor or you have no credit history, establish your credit over time. Start by getting a small loan secured with money. Make all your payments on time, and your credit improves slowly. Then it will be much easier and more cover the more significant expenses at an affordable price.
Once, you can recover you payday loan.