Payday Loans Debt Consolidation

Use These Seven Strategies To Pay Off Payday Loans

It is easy to get a short-term cash advance, as the eligibility requirements are very simple, but in most cases, people often fail to pay off payday loans in time. The main reason why most consumers end up defaulting on these types of loans is that lenders charge an extremely high rate of interest (usually a three-digit APR). Payday loan companies try to take advantage of your situation when you default. For example, they encourage you to borrow another cash advance to pay off the previous dues. Alternatively, they offer you an extension in the repayment period. But all these options, no matter how attractive they look like, have actually been designed in a way to trap you into a viscous cycle of debt. When the due date is extended, you are liable to pay additional interest for the extended period of time, which can actually cause the outstanding balance on your account to get just doubled or tripled within a couple of months. The similar things happen when you keep on borrowing new loans to pay off the previous ones because of the hefty penalty charges that are charged as part of the process. That is the reason why it is always advised never to borrow these types of risky loans. However, if you are already trapped into payday debt, there are ways to get out of it. Following are some strategies that you will find quite helpful in this regard.

Identify Your Mistakes And Make Sure You Do Not Repeat Them

Now that you have rolled up your sleeves and have decided to get tough to pay off payday loans, the first thing you have to do is to make sure that you do not repeat those mistakes again that actually caused you to get into debt at the first place. It means you must not borrow any new payday loan. You probably already have your quota full. You will have to look out for ways that can help you reduce the debt burden; you do not have to do anything that actually causes your debt balances to grow. That is obviously common sense, but common sense is something that is very uncommon especially when it comes to dealing with payday loans. The reason why this point is being emphasized here is that it is not an easy task to say no to new cash advances because your lenders will try their best to entice you to take more; they will present their nasty offers in attractive packages. Always remember, the longer you stay in debt, the higher profit your lenders are likely to make. In fact, this is how these predatory lending programs work.

Look At How Much The Loans Are Costing You

In order to prepare your strategies on how to pay off payday loans, the next thing you have to do is to do a thorough analysis and find out how much the loans are actually costing you. Most consumers when sign up for cash advances often fail to realize that these loans are actually going to cost them a lot. If you find it difficult to do the calculations manually, you can use an online payday loan calculator to calculate the same. Since you have already signed the contract, you cannot back out now and refuse to pay off the hefty penalty and interest charges unless the lenders are violating the laws (be aware of the laws about basic payday loan terms applicable in your state).

Arrange A Garage Sale

Probably, the reason why you find it difficult to pay off payday loans is that you do not have sufficient amount of cash with you. You have other financial obligations that are probably your priority. It means you must now look out for ways that can help you arrange some extra cash. One way to do this is to arrange a garage sale and sell of stuffs that you no longer need. American consumers are known to be very bad at spending, as in order to enhance their standard of living, they end up buying more stuffs at their homes than they actually need. If you look around, you will find many things at your home that you have not used since ages. This is the time to clean your home and turn those junk items into cash. You can do this by selling the same through a garage sale.

Cut Back On Household Expenses

Another effective way to get extra cash to pay off payday loans is to cut down your household expenses. Budgeting is very important at this stage. Once you have a tight budget plan, make sure you implement the same thoroughly. Avoid making purchases just on impulses. You should look at budgeting quite positively. For example, if you are cutting back expenses on eating out, you are probably trying to make your family healthier by avoiding high-cost junk fast food from restaurants. Sugary sodas may taste great but just plain water is probably much healthier for your children to drink. Even if you have nothing positive to think about budgeting, you are still advised to go for it, at least until the payday debt is gone. If budgeting sounds like a big, uncomfortable compromise to you, let it be just that; but anyway go for it.

Find A Temporary Second Job

It is quite understandable that you cannot stop making the monthly payments toward other priority loans, such as, mortgage or car loans just to pay off payday loans. But, you can definitely do many things to increase your income so that you can pay off the payday debt faster. Considering the kind of Internet age we are living in, it is not very difficult to get a temporary second job. You can do some freelance web content writing. There are lots of such freelance jobs available on Internet. When you accompany this extra income with the extra cash saved as part of your strategies mentioned above, you can soon accumulate enough money to get rid of your payday debt.

If your debt situation sounds overwhelming to you, you can also consider consulting with an expert credit counselor. In extreme cases, you may even have to consider using some debt consolidation or debt settlement programs to pay off payday loans.

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