Having the money to tackle any situation life throws at you can be challenging, so many people find financial flexibility through short-term loans—like payday loans. Although payday loans are designed as a short-term solution, not everyone can easily pay them back with their next paycheck. Often, they find themselves taking out another short-term loan to repay the original loan, and thus, fall into a cycle of debt.
When you want to avoid this situation, there are several tips to help you get a hold of your financial situation. Read on for a few ideas to ensure you pay off your payday loans quickly without going into further debt.
Take a Close Look at your Budget
A leading cause of payday loan application is poor budgeting. Spending money as quickly as it comes in can leave you without reserve funds when an unexpected situation strikes. To make sure you can pay off loans on time, you need to cut your expenses elsewhere. Creating a budget and looking at your spending habits will help you understand your situation better, so you can save money to pay on your loan when the terms are up.
Successfully reworking your financial situation doesn’t just rely on cutting back on spending. Finding new ways to get extra cash is also very helpful.
Utilize social media and other web platforms to sell stuff you don’t really use. You can also look for ways to earn extra money by asking for more hours at work or picking up a secondary source of income. This may increase pressure in the short-term, but it will give you a greater financial standing so you don’t fall into debt.
Work with Lenders on Interest Rates
High interest rates are one of the biggest challenges people face when it comes to repaying loans. This is particularly true for payday loans, which typically have much higher rates than other forms of credit. If the amount of interest that’s added to your loan is too challenging to pay back, talk with the lenders to see if you can negotiate a better rate. Many lenders are willing to work with customers that have shown they are serious about paying off their loan. It never hurts to ask, and getting a better interest rate can be a great help.
Enter into an Extended Payment Plan
When reworking the interest rate isn’t an option, consider taking out an extended payment plan. These plans are offered by many payday lenders and provide you extra time to pay on your loan without adding fees or extra interest. This can significantly ease the burden of typical payday loan repayment plans. While there are no fees with this option, you must specifically requested it.
If you think an extended plan is something that suits your situation, discuss it with your direct lenders as soon as you can.
Set Up Auto Debit Payments
Many payday loans are designed to be automatically withdrawn following your next paycheck, but that isn’t always the case. If your lenders haven’t set up an auto withdrawal, make sure to set it up yourself, so money is automatically debited from your account on a certain date. Now you don’t have to worry about remembering payments. On time payments are incredibly important, as late repayment results in compounding and costly fees.
Auto-payments are also good for your budgeting and spending habits. Seeing extra money in your account can be tempting, and you may want to use it on purchases you have been putting off, but with auto debit payments you know that the extra money is only temporary and will be withdrawn towards your loan rather than sit in your account.
Rollover Your Loan
Another helpful option that may be allowed is the ability to rollover your loan. By rolling over a loan you have more time to gather funds needed to repay on a loan. This option typically comes with additional fees, and there may be limits on the number of times a loan can be rolled over. Not every lending institution offers this option, so carefully research the lenders near you to avoid choosing one that doesn’t allow this flexible solution.
Seek Out Professional Credit Counseling
Not every repayment idea works for everyone. Finding the best way to repay a loan also depends on which options the lenders offers. To find the best option for your situation, it’s helpful to consult with professional credit counselors.
These agencies can give you great ideas for loan payment alternatives, and they often step in to help you negotiate a settlement with the lender to reduce payments toward other debts until the payday loan is settled.
Pay Off Your Loan
Whatever your financial situation is, don’t be afraid to explore your options. Hopefully, these tips gave you some ideas on where to look for financial help, how to avoid debt, and how to discuss your goals with your lenders. Getting financial backing from experienced lenders, such as Cashback Loans, can help you get the money you need quickly and it ensures your lenders are on your side. Learn more about your short-term loan options today.