Payday loans use your paycheck as collateral against a small and short term loan. Unfortunately, most people get these loans when they are desperately looking for cash, and they come with exorbitant interest rates. Falling into the cycle of payday loan payments can ruin a person financially.
Breaking this payday loan cycle is possible, just follow these simple steps.
The first thing to do is to take an assessment on your overall financial situation and resources. Starting with the facts will help you to set goals and look for options on getting out from these loans or avoiding them all together.
The important thing is to start working on getting out of the loan as soon as possible, otherwise ballooning interest payments will prevent any type of principal from being paid down.
It may be necessary to get a second job or work a little overtime to get the extra cash to pay off the loan faster. It will be worth it in the long run, and after one or two debts are paid off, then more money will be available.
Ask your lender for an extension as well. If you are using the loan to cover utility bills, consider asking your landlord for an extension so you can have more time to pay them. Feel free to ask all your creditors for payment arrangements which will reduce the size of the payment and free up extra cash.
Instead of taking another loan to cover this mess, consider reaching out to family members or friends for a loan. Maybe your employer will be willing to front you some money as well to help you manage your debt. Getting into these types of arrangements will drastically cut the amount of interest you are paying to the loan company.
Asking the lender will probably result in an extension which will give you plenty of breathing room to get that loan paid off early and fast. They may not give you ideal terms, but most of them will be willing to work with you.
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MLA Style Citation:
Thompson, Clark "Simple Steps To Get Around Financial Traps From Payday Loans." Simple Steps To Get Around Financial Traps From Payday Loans. 22 Jun. 2010. uberarticles.com. 29 Dec 2014 <http://uberarticles.com/finance/loans/tips-for-loaners-trying-to-get-around-the-payday-loan-cycle/>.
APA Style Citation:
Thompson, C (2010, June 22). Simple Steps To Get Around Financial Traps From Payday Loans. Retrieved December 29, 2014, from http://uberarticles.com/finance/loans/tips-for-loaners-trying-to-get-around-the-payday-loan-cycle/
Chicago Style Citation:
Thompson, Clark "Simple Steps To Get Around Financial Traps From Payday Loans" uberarticles.com. http://uberarticles.com/finance/loans/tips-for-loaners-trying-to-get-around-the-payday-loan-cycle/
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