3 Great Tips to Help You Pay off Payday Loans

ElitePersonalFinance
Last Update: February 10, 2021 Loans Save Money

Why do most people choose to take out payday loans? It’s to get some extra cash to help get them to their next payday in most cases. In many instances, a payday loan helps with an emergency. Times when people are most likely to get a Payday loan include:

  • The car breaks down, and you need to get it fixed to get to work until payday.
  • A household major appliance like the washer or dryer breaks down, and you need to replace it.
  • A family member becomes ill or passes away, and you have to make an emergency out of town trip.
  • Your child breaks his arm or leg after school sports, and you have to pay medical expenses upfront.

There are some excellent reasons why people take out a payday loan. But no matter how important the reason is for getting the loan, there will come a day when it has to be paid back. In most cases, it is due in full at your next payday. However, sometimes if you don’t have it, the loaning agency can grant an extension and allow you to carry the debt a little while longer. The most important thing to remember is that they will take the amount owed out of your check on your next payday, and you will need to plan accordingly. Here are also some tips for paying off payday loans.

Discuss with Your Payday Lender

Your very first option should be to speak directly with the payday lender. Sometimes they offer a hardship program for extenuating circumstances. For instance, you took out the payday loan due to your next payday, but you got laid off or terminated from your job the day after. You are possibly not going to be able to make the payment to the lender on time. If they have a hardship program, it will usually involve extending the time you have to pay back the loan and reduce the payments. Payday lenders are interested in making money off their loans, but they also want to ensure they get paid back. In some cases, they will make alternative payment arrangements to ensure they get their money back. If they do not offer any assistance, there are other ways to work it out.

Consolidate Your Payday Loans

It can be challenging trying to consolidate payday loans, but it is possible. There are basically two ways to consolidate payday loans.

  • Consolidate through another financing source.
  • Consolidate using a debt consolidation program.
  • Consolidating through a financing source

By taking out a personal loan, you can consolidate your payday loans. This is very handy if they’ve gotten out of hand and become very difficult to manage. It won’t save you the interest you’re paying on the payday loan. There are a few options for obtaining a personal loan, such as:

  • Home equity loan.
  • Apply for a personal loan through your bank or credit union.
  • Borrow the money from a trusted friend or relative and agree to pay it back in a designated time frame.
  • Payday loan consolidation programs

There are a few debt consolidation programs that can help you get out from under your load of debt when it gets too big for you to handle. They work closely with lending institutions to lower interest rates and make payments more bearable. Some payday loan agencies do not work with a consolidation program, but it’s always worth it to ask. Sometimes they are eager to work with them because it means they will eventually get their money back. They won’t get it all at one time. The desired outcome of going through a loan consolidation company is that the payday lender will accept monthly payments from you, which they will apply to your debt. Some debt consolidation companies are set up so that consumers pay them a single monthly fee, and they distribute it among creditors, including payday lenders.

Charge it to Your Credit Card

Using a credit card to pay off a Payday loan is not always the best idea, but it’s better than not paying the debt at all. Interest rates on credit cards are high but usually lower than those charged on a Payday loan. It’s an effective way to break the amount down into smaller, more manageable payments.

You can also get a cash advance if you have it available on your credit card. Most credit card account holders can take some cash out, but there is usually a fee for it. Check your credit card FAQs and TOS to determine if this would be a viable option in your particular situation or not.

Avoiding Payday Loans

Payday loans are an excellent resource when you have an emergency and don’t have any money available. The trouble comes in paying it back in a timely fashion. It can chip away at your next check, and you can end up in a much bigger financial bind than you ever intended. Always weigh the risks of taking out the payday loan before applying. If you have any other available options, try those routes first, and use a payday loan as your last resort. Ensure that you will pay it in full according to the agreement you make with the lender if you take out the payday loan. However, recall that there are times when the unexpected occur.

For those who are in a financially tough spot, these types of loans can do more harm than good. However, they can really help get you the cash you need to make it until your next payday in an emergency. Weigh out the risks and the benefits of payday loans to determine if it is the right option for you and your family.

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