Posts Tagged ‘reducing payday loan debt’

Reducing Payday Loan Debt – Some Useful Strategies

A short-term cash advance may initially look very attractive and a convenient way to get some quick cash, but because of the extremely high rate of interest that arte charged on it, things may soon turn out to be horrible, especially when you fail to make the repayment on time and eventually get pushed into a viscous cycle of debt. Luckily, the task of reducing payday loan debt is not a very difficult one if you know how to go about it. If you work on the right strategies, you can easily regain control of your finances and debts. Even if you have borrowed multiple loans and the outstanding balance is very high, there are ways to manage your debts in an affordable manner. Following is a brief rundown on some of the tips and strategies that you will find useful in this regard. The process will require some intentional actions from you. So, get ready for that as well.

Stop Borrowing More Loans

When it comes to reducing payday loan debt, the first thing you have to do is to stop acquiring more debts. You already have too much of it. There is obviously no need to make your situation worse. If you have been trying to repay your previous payday debts by borrowing new cash advances, stop doing that. You must have already seen it that such strategies are actually making your situation worse and the overall debt balance is only growing at a much faster pace.

Avoid Check Bouncing

When you accept a cash advance, you usually give a postdated check to the lender. Make sure that the checks do not bounce anymore. For this, you will need money in your account, which means you must be very careful on how you are spending that money. This is not the right time to go for purchases based on impulses rather than based on needs. If in order to ensure check clearance, you have to miss payments on other loans, such as mortgages or car loans or any personal loan that you have taken, do it. Missing a couple of payments on these comparatively low rate loans will not hurt you. Foreclosures happen only when you have missed at least 4-6 consecutive payments. You are not risking foreclosure by just missing one or two payments. Use that money to pay off your payday debt first; that should be your priority. Once you pay a large portion of your debt within the next two months, you can continue making the payment toward other priority loans, such as mortgage and car loans. In fact, to be on a safer side, you may even try to contact your mortgage lender or car loan lender and request them to allow you to miss a couple of payments so that you can regain control of your finances by reducing payday loan debt. They usually agree if you are ready to pay some extra charges for this convenience. Check bounces can prove to be very costly for you, as both banks and the lenders charge you a hefty amount of penalty charge for it. So, avoid check bounces at all cost.

Save More And/Or Earn More

It is very important for you to keep in mind that the longer the payday debts stay on your record, the faster your debt balance will keep on growing. Therefore, you must do everything you can do to arrange extra cash so that you can pay off your payday debt faster. If that means practicing frugality, go for it; that’s not a big compromise if it can help you get out of the viscous cycle of payday debt. Always remember, if you cannot earn more or increase your income, you must try to reduce your expenses; this way, you will automatically have the extra cash you need. However, it will be great if you can manage to get a second job or to work overtime.

Request An Advance From Your Employer

When it comes to reducing payday loan debt, you can also try to get some extra cash for the repayment by requesting your employer to give you an advance. If you have been a good employee and have a great employment record with many years of services with the same employer, you are very much likely to get the advance. The good thing is that the employer I quite unlikely to charge any interest on that advance. Furthermore, if you request, they may even allow you to pay the amount in small monthly installments.

Overall, when it is about reducing payday loan debt, there are plenty of strategies that you can apply.

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