Payday loans are also known as cash advance loans or payday advance. They are small unsecured loans which are linked to your payday. These loans can hurt your finances if you are not careful with them because their high interest rates add up. However, if you are in a dire need for cash, they maybe your best shot at solving an urgent need for money.
The loans are easy to access because the lenders don’t really care much for your credit card score or history. The rules for acquiring one are not so stringent and they are sanctioned fast. However, paying them off can be challenging, especially if you didn’t have a plan for paying it back when you took it. So, how do you pay off the payday loans? If you can consider some insightful payday loan relief tips to work with, paying them off can be a lot easier. On this post, I share with you seven insightful tips to pay off your payday loans.
- Avoid Payday Loans; find other ways to boost your income
Prevention is better than cure. It’s far much better to avoid payday loans than to implement a repayment program. You can avoid payday loans if you have more money coming in. There are always opportunities to make more income; you could consider making money out of a hobby, affiliate marketing, freelance writing, getting another job or a part time job. Alternatively, you could consider selling off items you don’t use. Applying this extra cash to your financial situation will help you avoid payday loans and or help you pay it off fast.
- Pay more than the agreed minimum monthly payment
Whenever you get some extra disposable income, prioritize paying off a chunk of your loan. If you don’t, you may end up squandering the money on something frivolous. When you make only the minimum monthly payments towards your loan, you are probably only paying off the interest that came with the loan and not the principal. Besides, making some payments in between the regular monthly payments will ensure that you pay off your loan fast with less interest. Even so, you first have to consult your lender if there are any repercussions for making extra payments when you have the cash to do so.
- Request for lower interest rates with the creditor
Many debtors don’t know this trick but it works; you can actually negotiate for lower interest rates with your lenders. If you are in a situation where you are sinking in debt and you think that you may not be in a position to keep up with the monthly payments, you can approach your lender, explain to them your situation. Many lenders have different plans for debtors with different financial situations. There’s always a good chance that they will understand and make the repayment process easier on you by lowering the interest rates on your loan. You’ll therefore be able to repay your loan faster.
- Consolidate your loans
Loan consolidation companies are a huge relief to many debtors. When you contract a loan consolidator to help you out; they will approach your lenders and take care of the loan for you. They save you the endless phone calls, text messages and emails which debt collectors bombard you with. They then consolidate your loans into a single loan with a low interest rate so that instead of servicing many loans at a go, you will be serving one loan with low interest rate.
- Borrow from your insurance or retirement savings
Payday loans are appropriate for emergency situations because they are almost instant. You get access to the money fast and they sure save the day. After sorting out the emergency, the focus shifts to paying the money back which is often the tricky bit. One way out of this bit is tapping into your life insurance or retirement savings. This path will definitely end with you receiving a lower payout in future when you make a claim on your savings but of what good is the saving if you are struggling with paying back a payday loan? Besides, the interest rates on your life insurance is very low compared to the interest rate on payday loans.
- Request for a cash advance from your employer
While it is inevitable that loans taken from credit institutions will come with some interest rate, a cash advance won’t. If it won’t inconvenience your employer, kindly request for a salary advance and use it to pay off your payday loan. In fact, many companies are always willing to help their employees out with advance paychecks, especially you are caught up with emergencies, and if you are a valuable worker who has been with the company for many years. Alternatively, if your employer does not allow for advance paychecks, you could consider taking a 401(K) loan because it doesn’t come with a withdrawal penalty.
- End the cycle of debts
Borrowing is not good for you unless you are investing the money in a business with a quick turnaround or using it to sort out an emergency. If you start to feel like your debts are getting out of control, you must stop borrowing or else you will only sink deeper into debt. If you are already struggling with making payments towards your debts, approach your lender and explain to them your situation. Kindly request for their advice but don’t let them intimidate you. Most of them would rather put you on a less stringent repayment plan than risk you defaulting. Just don’t let them manipulate you into taking a payday loan to pay their loans.
In a nutshell, payday loans can be enticing and very convenient. They are always among the first solutions to pop up in Americans’ minds whenever confronted with an urgent need for cash. They are sanctioned and processed fast. Even so, they have high interest rates and if they pile up they could mess up your financial foundation. We hope that these valuable tips will help you get payday loans off your back fast. For answers to questions or more information on how to deal with payday loans and debt consolidation, feel free to get in touch with us today.