Have you found yourself in debt from a payday loan? You’re not alone. Here are 7 effective tips for getting our of payday loan debt.
Rent was due, and payday was still a week away.
Like many, you turned to the convenience of payday loans for a quick fix. However, months later, you’re still struggling to deal with your payday loan debt.
High-interest rates and steep penalties mean what seems like an easy solution can quickly become an expensive problem.
If you’re wondering how to get out of payday loan debt, you’re not alone. Although it can be challenging, there are quite a few days to pay off your loan quickly.
Keep reading to find our seven best tips for getting out of debt from payday loans.
1. Ask For an Extended Repayment Plan
If you find yourself in a position where you can’t pay back your debts from payday loans, the first step is always to talk to your lender.
Although it can be intimidating to admit to your lender that you’re behind on payments or unable to pay, communication is always the best strategy. They would rather be paid back slower than not at all, so consider asking for an extended repayment plan.
If you’re able to spread your balance out over a longer period of time, your monthly repayments will then be lower each month. While you may end up paying slightly more in interest, at least you’ll be able to complete your repayments each month, which will keep your lender happy and will also help your credit rating.
2. Pick Up a Second Job
If you want to get out of payday loan debt faster, you may need to increase your income. Can you pick up a second job, or pick up overtime from your current job?
If you can earn more money, at least in the short-term, you’ll have more to put towards paying off your loan.
Even if you’re already working full-time, there are lots of flexible jobs available in the gig economy that may work with your schedule. Look into driving for Uber or Lyft, delivering food, using your expertise to help out on Airtasker, or becoming a VA, or virtual assistant.
There’s also always money to be earned waiting tables, working in retail, or stocking shelves or helping in warehouses. Sure, it may be tough and tiring to work two jobs, but it’ll be worth it for the satisfaction of getting out of debt.
3. Contact a Debt Consolidation Agency
If you’re really struggling with payday loan debt, it can be seriously stressful and may even impact your mental health.
While it may feel like there’s nowhere to turn, that’s not the case. Try contacting a debt consolidation agency to help come up with a payment plan that you can manage.
Consider contacting a group like the National Foundation for Credit Counseling to learn more.
Debt consolidation agencies work by acting as a mediator between you and your lenders. Together, they help manage and consolidate your loans into one monthly payment that’s within your budget.
This is a good option for those who are feeling the weight of multiple payday loans.
4. Use Savings
If you have any savings, are you able to put any towards your loan? Although we prefer to hold onto savings for a rainy day, or for big purchases like a home or a car, one of the best things you can do, financially, is to pay off all debts as soon as possible.
Payday loans are known for their sky-high interest rates. So, the longer it takes you to pay back your debt, the more you’ll be out of pocket.
In the long run, you’ll end up paying less if you can use savings to pay back some or all of your loan as soon as you can.
5. Cut Down Your Expenses
If you spend less each month, you’ll be left with extra funds that you can put towards your loan.
Try to make a monthly budget of all of your income and expenditures, looking for any areas where you can cut back.
For example, we all love eating out, getting delivery, and our music and tv streaming. However, we can also live without them for a few months if it means getting out of debt.
With a few months of serious budgeting, you can pay off your loan completely.
6. Ask Family For a Loan
It’s not an option for everyone, but are you able to ask family or close friends for a personal loan to pay off your debt? If they are willing to help you with an interest-free, or low-interest loan that you can pay off over time, you can then wipe out your payday loan debt.
This way, you won’t have to struggle with high-interest payments and you can get out of debt much faster.
However, you can also consider a second loan, at a lower interest, that you can use to pay off your loan. Find payday loans no credit check here.
7. Sell or Pawn Unused Items
If you need extra cash fast to pay off your loan, go through your personal items and see if there’s anything you can sell second-hand, such as through Facebook Marketplace.
Most of us have items around the house that we no longer need, such as bikes, sporting equipment, unwanted furniture, clothing, or toys for kids. You can turn your unwanted items into cash, or even pawn them locally.
While the value for second-hand items is never as high as what you originally paid, it’s still an easy way to bring in some extra money. A few sales each month may be enough to cover your loan repayments.
Pay Off Your Payday Loan Debt With These Top Tips
No one likes the idea of debt hanging over our heads, as it can be stressful and also negatively impact our credit rating.
Instead, use the tips above to completely pay back your payday loan debt. With a bit of creativity, you can pay off your loan sooner than expected, leading to a happier, debt-free life.
Then, start to build up your savings so that you don’t need to rely on payday loans in the future!
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