Payday loans can come in handy when you have a bill coming due but won't get your paycheck in time to pay it. However, if you don't stay on top of paying back these loans on time, the interest will accumulate quickly, and you may find that you owe a mountain of cash to various payday lenders. You took out those loans with the agreement that you'd pay them back—and failure to do so will make it harder for you to take out additional loans should you need them in the future. Here are some tips to help you get out of your payday loan debt.
Set up a payment plan with each lender.
If you don't make payments on time, lenders will start calling you. Many people avoid these calls because they're embarrassed to admit they're late paying back their loans. But there are definite benefits to actually picking up the phone and talking to the lender. Most payday lenders are more reasonable than you might imagine. Be honest with them if you don't have the money right now and ask if they can set up some sort of payment schedule for you to pay back the loan over a longer period. Most will be happy that you're at least making an effort to pay back the money you owe and will be happy to let you make five payments instead of one—or delay a payment for another week or two—if you just ask.
Find an extra source of income to generate cash to pay off the loan.
If you needed to take out a payday loan, chances are, you're on a pretty tight budget when it comes to paying your bills in the first place. By the time you pay for the necessities, there may not be much left to pay off the payday loan. But don't just let that loan sit there and accumulate interest as you stand idly by. Find a way to generate some extra income for a month or two and sock away all of that extra income to pay back the loan. Some good ways to earn some quick money include these:
- offering to mow lawns for others in your neighborhood
- selling items you don't need on Ebay, Craigslist, or similar sites
- picking up a second job, such as delivering pizzas or newspapers
- babysitting a friend's children
Put any "extra" money you earn straight into your savings account so it's not easy to spend. As soon as you've accumulated the amount you owe to the payday lender, transfer the money to your checking account and make the payment.
Borrow the money from a friend.
Since the interest rates on payday loans can be quite high, it's important to pay them back quickly. Wait a few extra weeks, and you'll end up owing substantially more. If you're really worried about the interest on a payday loan and don't have the cash right now to pay it back, consider borrowing the amount that's due from a friend or family member. That way, you'll owe someone close to you—who won't impact your credit score or ability to borrow in the future—rather than a professional lender.
Make sure you take steps to pay the family member back as soon as possible. Before they lend you the money, decide how much interest you'll pay them. You'll want to pay them some interest as a way of paying them back for the favor of lending you money, but you want to ensure this interest is less than you were paying the payday loan company. (Otherwise, there would be little benefit in borrowing from the friend to pay off the payday loan.) Write down the amount loaned and when you'll pay it back, and then sign it along with your friend. Be realistic about the time you need to pay the loan back so you don't end up paying your friend late.
Having payday loans coming due when you're short on cash can feel overwhelming, but with the tips above, you can handle the situation with grace and dignity. To learn more about payday loans, visit a website like http://www.paydayexpresscashadvance.com.