A lot of people turn to payday loans to get out of a tight financial spot. These short term loans entice the customer by offering easy and fast credit, with no need for good credit scores or collateral.
All you generally need is a checking account and a regular source of income. However, there interest rates are very high, and a lot of people end up in a debt cycle, renewing loans each payday because they have run out of cash due to having to repay the loan that month.
Getting yourself out of the nightmares of payday loans can be tough and tricky but it is possible.
What if you find yourself in this debt cycle?
Close all accounts that are associated with the payday loans that you have.
If you have found yourself in a position where you cannot pay off the loan, the lender may still be entitled and automatically taking cash out of your bank account.
If you don’t have any cash there, then you will have to deal with the added overdraft charges, late charges and returned check fees from your bank. Avoid all this by closing down your account for now, at least temporarily.
Immediately inform your lenders that you have decided to close down your account.
Don’t keep them in the dark about your intentions, just explain to them that you will really try to repay the loan, but at the moment you don’t have any money in the account. Don’t avoid any calls from your lender - the longer you keep dealing with them personally, the longer they will take to turning you into the collection agency.
Try to arrange the payment plan so as to pay off the loans without making use of your checking account. Ask your lender if this is possible, hopefully they will decide not to turn your debts over to a collection agency if you pay off the money yourself.
Offer to pay off in one lump sum, if you really have it and the lender agrees to drop the financial fees associated with the loan.
Financial charges are really what hurts the consumers the most, as they range between $10 and $30 for every $100 borrowed . The lender may negotiate the terms if you can offer a lump sum pay off plan that pays the principle of your loan.
Apply extra cash to the debts until it’s paid off, which can actually be done in different ways.
Decide to work extra hours, dispose your unwanted items, take a second job to finance the pay off. You can even consider getting a quick fix loan from friends, family or an advance from your employer to pay the payday loans, thus freeing your mind and soul from the worry that you will be turned over to the collection agency which will hurt your entire credit score.
Finally the best opportunity is to consolidate the payday loans so that you can be paying a single manageable loan without any stress. You can legally get out of the payday loans if you really understand how this kind of business works and for instance you do the proper and detailed research on your current situation.