Steps to Break the Cycle of Payday Loan Debt
If you are dealing with a payday loan and you are not able to keep up with it then these loans may be a headache and cost you a lot more than you would have borrowed in the first place. The reason behind this is that the lenders of payday loans make the loans expensive intentionally and make them difficult to be repaid by the customers. There is almost an APR of 381%. A common borrower generally pays $520 in five months before he pays back the entire loan that he has borrowed.
Have a look at all the debts
If you try to pay back the loan, you may be focussed on paying back the fixed amount that you have borrowed but, here you must have a look at the entire picture of the financial situation. Having an overview of the entire financial picture you may have the opportunity of saving a lot of money or repaying the debt.
Request for a payment plan that can extended
The structure of the payday loans and the way they are to be paid make them more difficult to be repaid and expensive. Therefore, you must re-structure your debt of the payday loan. You must request for an EPP i.e. extended payment plan. This would help in breaking down the loan that is to be repaid into smaller payday installment loans. This would help you in getting more time in repaying the loan and your interest would be reduced.
Use a personal loan to refinance it
You can go to some other place to cover up the money to be paid here. You may take a personal loan and use the money from this loan to pay back the payday loan. A personal loan would charge less rate of interest from you and therefore, you will be able to save a lot of money. However, here you must keep in mind that before becoming eligible for a personal loan, you must have a clear credit balance.
In order to get your finance back on track, you must figure out the way in which you want to repay back your payday loan. It might be hard to figure it out in the beginning but, once it comes on track, it will be all smooth. You can fix the money freely into some other place without any burden of a payday loan.