Going through a rough patch and need extra cash to solve some issues at hand? If you are thinking about getting a payday loan, please do.
Payday loans are a blessing in many sense. They are going to provide you that much needed moment of relief when stuck with a cash deficit. Typically, payday loans are short-term cash loans of a few hundred dollars that you borrow against a post-dated cheque. You make the repayment of the borrowed amount along with the interest when you get your next pay. If you do not make the payment on the agreed date, then the lender can cash your check to get the borrowed amount, interest, and non-payment fee.
If you wish to make the payment later, one usually has the option to renew the loan repayment for the next payday. It is called ‘Rollover’ and comes at a very high cost as the repayment amount almost gets doubled. However, this rollover may sometimes push you in the ‘quicksand effect’ of the payday loan. Once you are in, no matter how hard you try, you keep sinking deeper!
If you have somehow gotten yourself involved in this vicious cycle, please go through the tips below to smartly tackle it and eliminate it eventually.
Tip 1: Stay Cool And Plan Well
Payday loans have a very short tenure, i.e., until your next payday. Those 15-20 days will pass by like a gust of wind, and you will be in a state of panic to make the repayment. If you don’t get the income you were expecting, then you will have to ‘roll over’ the loan, increasing the repayment amount significantly.
All of this could be avoided if you plan well. Usually, the amount initially is small, and that’s what makes you negligent about its exponential nature. The moment you borrow a payday loan from a lender, you must make it your short-term priority to arrange the repayment amount. If today you borrow that cash to take your mother to the hospital in an emergency, from tomorrow onwards, you should be calling your friends and family for help with the repayment.
Tip 2: Negotiate With Lenders Over Repayment Control
At the time of taking a payday loan, make sure that you give minimum control of repayment to the lender. Lenders might even ask for a blank cheque with your signature, saying that the amount could increase if you are unable to pay on time. That’s a big NO. Always put an amount on the cheque according to the repayment schedule before signing it. Some lenders might ask you to give them CPA – Continuous Payment Authority.
If they have a CPA, they can deduct payments from your bank account regularly. So, whenever you get money credited to your account, they will debit their charges without your consent. Try giving them a post-dated cheque with a fixed amount. If they keep pushing you to give CPA, then do so with a time limit of two months. Nothing more!
Tip 3: Never Take More Payday Loans To Make Repayments
The easiest way to get sucked into the debt-hole is to keep borrowing more money to repay the previous debt. Just imagine that you have been rolling over your payday loan repayment for the last three months, and now the numbers look scary. To make some of the payments so that the interest rate gets reduced, you take another payday loan. And then you live happily ever after, burdened with loads of debt! One lender is more than enough. Avoid taking more payday loans at all costs.
Tip 4: Ask The Banks To Stop CPA
If a lender keeps using the CPA, request the bank to stop all the CPA transactions. This way, you will have more control over the repayments, and some breathing space to chalk out a proper plan.
Tip 5: Ask Your Employer For A Loan
If you are employed, then getting out of payday loans becomes a lot easier for you. You can request your organization to lend some amount which can be utilized to pay off your payday loan. You don’t have to pay interest on the money borrowed from your employer. Repayment of an employment loan can be made in easy instalments in the form of small deductions from each month’s salary.
Tip 6: Have Some Side Hustle To Make Timely Repayments
Earning extra cash is never a bad thing. You should have done it in the first place to avoid going for the payday loan. However, you can still do some freelancing with the skills that you have. Use the extra cash that you are earning to pay off the loan amount ultimately. If you are not making enough, at least pay the interest amount on time to contain the primary debt within limits.
Tip 7: Ask Your Friends & Family For Help
Do this before it is too late. Even if five people from your inner circle contribute $150 each, you could quickly repay the full amount with interest if you had taken a $500 payday loan. But if you go to them when the amount has grown up through the ceiling, you might end up a bit disappointed!
Tip 8: Sell What You Don’t Need; Save What You Need
It is time that you listen to your wife. She has been asking you to get rid of the unwanted stuff in your home for days. Sell all that you don’t need. Place it on eBay for sale and use the cash for the payday loan repayment.
Tip 9: If You Can’t Earn More, Spend Less!
So, you have tried all possible ways of earning more, only to have failed miserably. Don’t worry; you can still get the payday loan off your shoulders. You have to cut down your expenses. Stop eating out and going to movies until you have paid your mortgage off. Remember, a penny saved is a penny earned.
Tip 10: Contact Government Mediators For Support
If you are already in too deep, and the debt has compounded up to an astronomical sum, then you should seek out government-appointed mediators. Almost all countries have debt mediation organizations that are there to resolve such issues. There are laws in place to safeguard the interests of both the borrower and the lender. It would be helpful if you have taken multiple payday loans, and the lenders are pressurizing you to make payments that are out of your financial reach.
Conclusion
We are sure that after going through the tips shared above, you must have gotten a fair idea about the significantly trouble-free alternatives to pay-off your payday loans. No matter how star-crossed you may be, there is always someone to extend a hand of support. Try to have some side income, and always keep some emergency reserves for the day when you will find all the phones busy or switched off, except the phone of the payday lender.
