How to Get Out Of Payday Loan Debt

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How to Get Out of Payday Loan Debt – Escape Payday Loans

Borrowing payday loans is a short-term measure to meet emergency expenses such as car repairs and medical bills. However, it’s not a solution that will help you catch up on your finances. There are other options with lower interest rates that can improve your financial situation and help you get out of payday loan debt.

Have You Considered Escaping the Payday Loan Hassle?

Payday loans can give you access to money on short notice, but getting this type of loan multiple times may result in a nightmare if you don’t manage this instrument with care. A typical loan includes a high interest rate and lender fees. If you are late on the repayment of this payday loan, there could be additional penalties and fees. If you choose to pay this type of loan off over time, a very small portion of each payment goes to the loan principal. If you let your lender roll over the loan because you can’t pay it off yet, then that fee tends to trap you into an endless money pit. It’s hard to get out of this serious, but unwise financial commitment.

How Do People Get Into This Type of Debt in the First Place?

Thinking about when you are short of money will explain why you might resort to a short-term, high-interest loan. If the brakes suddenly stop working on your car and you can’t get to work, you could be desperate for cash. If there is no room available on your credit card, then you need cash quickly or you can’t get your car fixed. How will you get to work without a safely functioning vehicle? You agree to the payday loan even if you aren’t sure that you will be able to afford the loan’s total cost.

Another scenario is suddenly losing your job. The big mortgage payment of $2,000 is due. There is not enough money in the family savings account to make an on-time complete payment. Really, most people in the U.S. today don’t have enough savings in their bank account to get through a week of expenses. Other people have little or no savings because they live paycheck to paycheck.

A payday loan is not like getting a home loan or a car payment. There isn’t much of a credit check or a ton of forms to complete. With a payday loan based on your regular paycheck, consumers usually get a rapid turnaround time, quick approval, and easy access to funds. This is convenient but easy to get accustomed to without properly managing your finances.

If you feel desperate for cash, you are wise to consider how to get that through another method. Borrow some funds from a friend or get a low-interest consumer loan. Sell some personal property or household goods that you and your family clearly don’t need. Get a temporary second job and wait until you get paid. Cut a few lawns in the neighborhood or do some handiwork for the neighbors. The payday loan costs are more than most people can afford to pay back in terms of interest. Almost any other source of funding is wiser.

How to Escape Payday Loans and Payday Loan Debt

If a consumer finds himself or herself in a position where it’s too challenging to satisfy the repayment terms of a payday loan, then the risk is that it will go to a collection agency. This type of reporting can hurt a consumer’s credit score and make it hard to borrow other loans or to get approved for a mortgage. It’s advisable to get out of this type of debt as soon as possible and not to resort to it again for short-term cash.

Try to negotiate a longer repayment period.

Getting away from the repayment schedule for a payday loan makes your financial situation worse. Struggling to meet the payments is not something to ignore. Contact the lender and see if they will offer any other options. Agree to credit counseling or debt settlement in exchange for smaller payments. Hopefully, the interest rate will not change. If you are super lucky, the lender will stop calculating interest on the note and build a customized schedule that fits your budget. While lenders want to recoup their funds quickly, they also want to avoid this account going to collections.

Look for other funding sources to payoff or consolidate the loan.

Instead of borrowing again, find cheaper ways to get cash like these ideas:

  • Ask for a raise.
  • Change to an employer that offers higher wages.
  • Sell an extra vehicle.
  • Get a higher credit line from an existing credit card.
  • Use a cash assistance program through your church or employer.
  • Get a credit union loan.
  • Enroll in a debt management plan.
  • Get a co-signor for a conventional loan.
  • Negotiate settlements on collection accounts.

Make Better Financial Decisions in the Future

  1. Don’t use online lending sources such as overseas, tribal, or unlicensed lenders.
  2. Don’t use a lender sourcing service that gets paid by generating leads.
  3. Don’t agree to hidden fees.
  4. Don’t pay too high of an APR.
  5. Don’t borrow to cover expenses for which you could save until you’ve got enough to pay in cash.

Payday loans are one type of consumer borrowing that gets you trapped into an endless black hole of debt. Better sources of cash are sure to keep you from repaying more than you originally borrowed.

If you can foster better spending habits and avoid overuse of credit cards or personal loans, you will be happier and in less debt overall. You can also save money so there is an emergency fund. This may start with putting away twenty bucks every paycheck or not spending anything earned at a part-time job. Just do it little by little so that you and your spouse will avoid this financial strain down the road.

 

4 thoughts on “How to Get Out Of Payday Loan Debt”

  1. This may not be as cut an dry as you think. These loans are predatory by nature. That being said this was a helpful resource if you’ve just lost your job or home. But these loans are not a long-term solution at all

    Reply

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