Payday Loans

Five Debt Relief Options To Help With Payday Loan Debt

If you are looking out for ways on how to get help with payday loan debt, there are several options available out there. You can choose a suitable option on the basis of the severity of your debt problems, such as how much is the overall outstanding dues in your name, how many lenders you owe to, and an array of other such factors. In extreme situations, you may even have to consider filing for bankruptcy. Before you proceed with a debt relief option, it is very important for you to make sure that you are not being overcharged and that your lenders are not engaged in any unfair or illegal practices. For this, you must have a thorough understanding of the payday loan laws applicable in your state. If you are sure that everything is line with the law, you can consider one of these five options.

Self Repayment Plan

You do not always need a professional third party to help with payday loan debt; if you follow the right approach and make informed decision, you can pay off your debts on your own with a little planning. The steps are simple, at least in theory. You first have to gather all the details on how much you owe to which payday lender and how much interest and other charges you are paying on it. Prioritize them with the highest debt with the highest interest first. Do strict budgeting in order to save a decent amount of extra cash, which you can contribute toward the debt repayment. Practice frugality if required at least for a couple of months until you pay off all your outstanding dues. You may also consider working overtime or getting a second job to pay off your debts faster. Try negotiating a repayment plan with your payday lender.

Debt Management

Debt management, debt consolidation, and debt settlement are often mistaken as different terms for the same thing, which is not true. Each of these options can help with payday loan debt but has a completely different process. For example, in debt management, you work hand in hand with a professional credit counselor, who educates you on how to manage your debts and how to do some strict budgeting to get your finances back on track. They will review your financial situation and provide you suggestions accordingly. If needed, they will even negotiate with your creditor on your behalf to make the terms a little more favorable in order to make the debt repayment affordable to you. The debt management company or the credit counselor you work with will charge a certain amount of fee for their services. When you choose the right company and the right program, you can get several benefits. For example, you can avoid direct contacts from creditors, which means no more harassing collection calls. Your debt management company will be dealing with your payday lenders and collection agents on your behalf. The chances are that even the late fees and other charges may also be waived off and interest reduced to a comparatively very low rate. Eventually, you end up paying off all your payday debts in small monthly installments.

Debt Consolidation

Debt consolidation can also help with payday loan debt, but in a different way. In debt management, you have to make individual payments to individual payday lenders, but this option allows you to merge all your debts into one big loan. You can then pay off this big loan in several easy installments. This way, you end up making just one consolidated payment every month. You pay this consolidated amount of money to your debt consolidation company, which then further disburses the same to your individual creditors based on how much is due to whom. Debt consolidation company also negotiates with your lenders and convinces them to reduce interest rates and waive off penalty charges. It also helps you avoid lawsuits and wage garnishment, if any.

Debt Settlement

Debt settlement is an option that you can use to help with payday loan debt in a more serious situation, where you are going through a severe financial crisis and there is no way you can pay off your debts in full. This option is usually available for those who have lost their jobs or are suffering from serious illness or are going through any other such crisis. As per the process, a deal is negotiated with your creditor, where you are asked to pay a reduced amount of money (less than the total outstanding dues) in full and final settlement with the entire payday debt. You can negotiate such a deal either on your own or with the help of a professional debt settlement expert. In most cases, your lenders may agree to write off up to 60% of the total outstanding balance. Depending upon the negotiated deal, you may even get the convince to pay off the reduced amount of money in several monthly installments, but the overall repayment period here is much shorter as compared to the one offered under debt consolidation or debt management programs.

Bankruptcy

In the most extreme situations when there are no other alternatives to get rid of your debt problems, you can take the drastic step of bankruptcy filing to help with payday loan debt. Remember, this should be your last option, not the first choice because bankruptcy ruins your credit score and even have several other adverse effects on your financial life. You are strongly recommended to avoid bankruptcy and consider working on a better alternative, if possible. If you are sure that there is no better option, go for it.

No matter which option you choose to go for, you must first get yourself educated on the various aspects associated with the same. Make sure you thoroughly understand the pros and cons of all the options before you finally decide to choose one to help with payday loan debt.


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Posted in Payday Loans, Repayment Strategies | 2 Comments »

2 Responses to “Five Debt Relief Options To Help With Payday Loan Debt”

  1. [...] This post was mentioned on Twitter by Rajesh Anand, Eli. Eli said: Five Debt Relief Options To Help With Payday Loan Debt http://goo.gl/fb/StXAa [...]

  2. james says:

    An amazing article on the ways to get out of the web of loans as so many ways are suggested by means of those you can get rid of troubles. There are so many ways to choose from, it all depends on the stage and the loans you are dealing with. Make sure about one thing that you should be aware of all the laws in force of the state you are living with before choosing any relief option.
    One way that you can opt is paying all your loans by yourself, just make a summary of all dues and start paying from the higher to lower in terms of amount and interest. Prepare yourself to work for some extra hours to implement this plan.
    You can take the help of institutions engaged in servicing clients in managing their credits. Professional will guide you and talk with the money lenders and take necessary steps. You can hire a company which will combine all you loans and pay your all dues to different lending houses on your behalf now you have to pay the company in a single installment only thus brings a mental relief

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