How to Get Rid of Payday Loan Debt | 4 Paths to Debt Relief
Did that payday loan you got so easily just also so easily turn into a loan that was a headache to pay off? Are you drowning in payday loan debt and want to be able to take a breath and go on but having trouble doing so?
There are ways to pay off payday loan debt. There are other ways to eliminate payday loan debt even more quickly than paying it down.
What you do depends on what your determination is, what you are able to do, and could include how disciplined you are, depending on what you set your path to be in your pursuit of financial freedom after a crisis loan taken out with bad credit.
Here are the basic ways to get rid of payday loan debt.
1. Pay some, or more, and at least SOME, extra over and above your finance charge each time you are scheduled to repay your cash advance.
Payday loans are expensive. The are, in fact, so expensive that when a person feels an urgent need to get one in a family crisis, they discover their crisis has just begun, or at least they have created another, perhaps, smaller one.
Finance charges on a bad credit loan are so high that, come pay day, many feel they can only pay the finance charge and no more. When that option is given, and the loan recipient takes that option of not paying more than those finance fees (or RE-finance fees), nothing will ever get paid off of the principle… and then those same high finance fees are there the next time around then again!
If you care about your commitment and want to pay your loan down but don’t think you can each time, find a way to pay something… SOMETHING.
It will take discipline, maybe giving up something for a couple of paydays, maybe working a little more for a while, or selling something you own, but with each little bit over and above the finance charge you pay, you will owe less the next time on your finance charge.
So many just give up on paying anything extra and just keep paying finance charges each month. That is so uncool on your family’s budget, and you’ll NEVER get out of debt that way!
Most payday loan companies will accept as little as $25.00 over your finance charges when your payday loan comes due. If that is all you can pay, pay that. If you can pay $50.00 over, pay that. $100.00 over will make you feel really good, like you have taken a real step towards getting rid of your indebtedness to these lenders! But even paying $25.00 over feels pretty good.
Do this each time, and you’ll see the results.
When your next pay day arrives, and your entire loan or at least another finance fee is due, you’ll have a lower finance fee. Pay a little more again.
The sooner you can pay your entire debt off the better, but anything at all, no matter how small you can do, is better than doing nothing.
And yes, if you are repaying your cash loan repayment this way, you can still just pay the required fees on a really hard week and go right back to paying your loan back down the next time. This is one advantage of a simple payday cash advance loan vs an installment loan where you will have the same amount due every single time, no matter how much you paid on principle already and if you have a bad paycheck or not (or an additional special family need at some point).
Just keep at it, paying something each time! It does get easier and easier as you pay the principle down and see those corresponding smaller finance charges each time.
Yea, it’s a LOT of money you are paying on interest and fees each time, especially when you drag it on, but if you got that emergency loan with a bad credit rating, that’s the price you are paying for it.
Keep a cheerful attitude that you had the help when you absolutely needed it and then be determined with all your discipline and commitment to pay what you can each time, rejoicing each time you owe a little less.
2. Payday loan consolidation programs are available with lenders ready to assist individuals who qualify for their programs.
Chose this option if it fits better into your family’s needs and your abilities, and consolidate payday loan debt only if it results in a wiser way to repay the loan amounts you have. Sometimes paying down one loan at a time, even with the high interest rate and finance fees, is a cheaper way to get out of payday loan debt than getting another, larger high interest loan.
3. As a third option, payday loans can sometimes be settled through a payday loan debt settlement, either by settling with them yourself or with a payday debt settlement company.
This option will hit you pretty hard as far as your credit score, (bad can get worse sometimes), but it is worth considering when you don’t know what else you can do.
Note that an online payday loan does not necessarily have the same rules to live with than a payday loan store which has a presence in your state.
Many debt settlement companies that help you with a bad credit payday loan settlement can sometimes, depending on the license of the online lenders, work out a much smaller amount to settle online payday loans than those store front companies where you live.
However, if your finances have soured even more after taking your loan, and you want to try to work out arrangements with a lender, the local lenders you can speak directly with may be easier to handle.
Whether you choose a debt settlement company that specializes in payday loans or attempt to work with the lender yourself, make sure you get and keep records of every single communication, agreement, and transaction.
Working with bad credit lenders who are used to problematic pay offs can be a real challenge for the person who is having trouble paying off a debt to those lenders.
4. Finally, if you find yourself in a corner with all kinds of debt you can not pay (not just from payday loans but from an entire financial mess), and bankruptcy is the only option for protecting your family and going on, payday loans can be added to your list of creditors in a bankruptcy.
Do know this though!!! Those who try to get a quick cash advance right before filing for bankruptcy may find they have problems with the Bankruptcy Court or with the payday loan lender, both of which may see that last minute loan prior to bankruptcy as racking up the debt with no intent to repay that debt, AKA fraud.
You might also discover that cash advance loan right before filing will keep you from filing when you want to file, or NEED to file.
So wiping out debt of a no credit check payday loan taken out a month or two before filing bankruptcy will be problematic as is paying that lender back during that time (which you can not do if you have filed for bankruptcy protection).
However, if you have recently taken a loan or cash advance out and are planning on submitting a request to go bankrupt, speak with an attorney who can help guide you as to how to handle that cash advance you recently took. It may mean holding off filing for a month or two until some time has passed, or perhaps your attorney will have another way of handling that recent debt that will not affect your case in court and chance at protection and a fresh start.
The cheapest, least disruptive, and probably best way to get out of payday loan debt is to pay it off at the very next payday. The next best way, in my opinion, is to pay it down and then off, on your own, as soon as you can.
If you took some emergency payday loans merely due to time restraints and lack of savings but your credit is good enough to get a low interest personal loan for good credit, you might also look into what personal loans might be available to you. You could consolidate those loans from bad credit lenders into one low interest loan and save money while paying your loan off.
If you were in a crisis with no savings and bad credit, and you have bad credit still, using a bad credit installment loan could result in even higher monthly payments. Since you were struggling enough to get payday loans and cash advances to begin with, I’m pretty sure you don’t want to make your payments even higher. Therefore, if you want to consolidate loans, check interest rates and payments, and consider what you can get… and what you can handle.
So paying your loan off immediately (hard for most) or paying down principle some each time, no matter how small the amount each time (difficult but not as hard as you might think if you are determined) are your best ways to get out of pay day loan jail.
However, if it becomes apparent you are struggling on your own and are to the point you can not handle your circumstances as they are anymore, payday loan debt relief services are readily available. If needed, take advantage of the assistance there, do what you are able to do, and remember that you did what you felt you needed to do at the time.
Then forgive yourself, and do what you CAN do now.
This is the 9th article in a series of articles on cash loans for people with bad credit.
No credit check loans don’t mean no problems later. Please feel free to read the other articles in this series which go from considering cash loans to paying them off to being in deep trouble with them.
You can see our other articles in the related posts below, or see the first article of the cash loans with bad credit articles for a detailed topic list.
And wherever you are in the process, I pray you will find peace at this time and hope for the future. This too shall pass. It really will.