Reduce your payday loan debt.
A payday loan may initially seem like a convenient way to get cash until the next paycheck, but these loans can come with outrageously high interest rates and can quickly turn into a perpetual cycle that flips personal finances upside down. Many people fall into the pattern of using these loans on a regular basis, but having several loans out at once can make the task of reducing the debt very daunting. Reducing this debt requires intentional actions from the borrower.
Instructions
1. Don't take out any more payday loans. One of the tricks of payday loans is that they often become a perpetual recourse for borrowers when they run out of money. It's not uncommon for borrowers to have more than one payday loan at a time, often from different vendors. Taking out additional payday loans--no matter their size--will only increase the total amount owed and make it even harder to pay them back.
2. Make sure your checks clear as agreed. You will encounter a wide variety of additional fees and penalties if your check does not clear your checking account on the date on which it was post-dated. All these additional fees will only push your total debt up much further. Make it a priority to ensure that the money you need to pay off the payday loan is sitting in your checking account and fully available when necessary.
3. Put extra money toward the debt when possible. Read the payday loan contract to find out if there is a way to pay off the loan early and have the post-dated check returned to you. If this isn't possible or if it results in a hefty prepayment penalty, then put extra money into a savings account to make sure that you won't need to utilize the services of a payday loan company in the future. After all, you probably won't need to seek out payday loans if you have some money sitting in a savings account.
4. Take money from other sources to either pay off the loans or pay your expenses so you won't need another payday loan. If you're constantly obtaining payday loans at really high interest rates, yet you contribute a good portion of your weekly pay to a retirement that is more than 20 years away, it's time to reassess your financial priorities. Although it's good to think ahead for retirement, you also need to focus on the present and stop the cycle of obtaining payday loans to meet expenses.
5. Keep track of the existing payday loan terms. These lenders charge incredibly high fees for loans that are defaulted. Know when the checks are scheduled to hit your checking account. If you have several payday loans out at once, maintain meticulous records so you'll not only know when the money will be withdrawn from your account, but realize when an error has been made and you need to contact the lender. If you don't catch errors then you might wind up paying more than you actually owe.
