Payday Loans

How to Pay Off Your Payday Loan

Are you trapped in payday loan cycle? You get new payday loan to cover your existing loan and it keep repeating until you are overwhelming. If you are, you are not alone. Many people take out their first one hoping to pay off in full in the next payday, but end up with taking out more loans and scrambling to cover one after another until their debt reach to the overwhelming level and don't know what to do. How to break this payday loan cycle and pay it off? Here are 5 practical ways to help you break the payday loan cycle:

1. Understand What You Are Up Against

Each state and each country have certain law against payday loan borrowers. For example, Oklahoma's laws allow payday loan's repeat borrowers who have taken out three consecutive loans to repay their loan balance in four equal installments. This is a good opportunity for you to break the cycle and pay off the loan.

You should also be able to find your local or state government representative that can provide help and advices on how to handle your overwhelming debt issue. You may discover more options to pay off your payday loan.

2. Pay the Loan(s) off ASAP

The fact is whatever you have borrowed, you need to pay it back; Let face it. Thinking of paying off your payday loan without any action won't get your debt problem resolve. What you must do is finding a way to repay the loan in the next payday without getting a new payday loan and find some way to get through what will be a very difficult several weeks without the money.

Some ideas to cash out money to pay loans:

Have a yard sale or garage sale. Put anything that can be sold such as furniture, clothes, gifts, watches, jewelry and etc.
Sell a few things in your local newspaper's free ads or sell them online at eBay.
If you are under employment, you may discuss with your employer to get an advance salary and repay it over several pay periods.
Borrow from your family or relatives to pay off your payday loan and repay them over several pay periods.
Get a second job or part-time job to earn extra money to clear your debt.
Cut down your monthly expenses and optional spending such as entertainment, clothing and vacation to save more money to pay into your debt.

3. Get Help From Credit Counseling Service

If your debt is too overwhelming and something in such a desperate situation, you can be out of mind in thinking a solution. Then, the best option should be getting help from finance professional such as credit counseling service.

Consumer Credit Counseling Services (CCCS) are non-profit counseling centers that can offer you with individual financial advices based on your financial situation. A consultant will be assigned to you to understand in details your current financial situation before proposing options and solutions to your financial issue. These options can be especially helpful to help you understand your options and what are the best solutions to your debt issue. In many case, you will be advised to enroll into their debt management plan so that you can follow their plan to work your way out of debt. However, it is optional but if you decide to enroll into any debt management plan, you must aware that there will be a small monthly fee involve.

Summary

Keeping yourself circular inside the payday loan cycle will drag you into overwhelming and stressful debt issue. The only solution is finding a way out of it by breaking the payday loan cycle. Beside, working out your own ways to pay off the loan as soon as possible, you can get help and guidance from professional such as consumer credit counseling service.

Cornie Herring is an finance author of http://www.debt-consolidation-1stop.info, an informative website that provides FREE information and guides on personal finance, debt management & bankruptcy alternatives. You can find useful information and resources to reduce and eliminate your debt issues at her website.

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Avoiding Payday Loans

A payday loan can seem like a quick and easy solution for a short-term hiccup in your cash flows. And in the right place at the right time, a short term loan to stretch your cash until the next pay check is just the answer.

But as with any form of borrowing, payday loans have risks and traps, and of course all borrowed money comes at a cost. The cost of a payday loan over the short term, which is what they are designed for, is not very much, and can be compared to the cost of a taking a taxi ride. Like a taxi - payday loans are VERY expensive for a long trip - but justifiable for the short haul on an occasional basis.

So, regardless of what a lender may tell you, if you think you may need to keep a loan for longer than (say) 4 weeks, or two to three paydays, then you should be thinking about other ways to meet your funding needs. If you have a long-term need, or insufficient income to make short-term payments, these are good reasons to avoid getting a payday style of cash advance.

But what are the alternatives? It's easy enough to recommend avoiding payday loans because of the cost, but not so easy in practice. However with a bit thought, and hopefully after reading this, you can explore alternatives before jumping for a payday loan.

Debt Problem?
If you have a debt problem , meaning your income is simply not enough to cover your outgoings, then a payday loan is not going to help, in fact it will only make your situation worse. So get proper advice, make use of debt counselling services which are either free or low cost, for example see www.debtadvice.org

Credit Card
If you have access to a credit card, it can have significant advantages over a payday loan, and is more suitable for a longer period. Take advantage of zero rate balance transfer deals, flexible re-draw ability, lower interest rates (lower than payday loans) and minimum monthly payment requirements. But also keep in mind that there are penalties for late payment, and you should have a realistic re-payment plan in mind. The longer you keep the money, the more it costs.

Approach Your Employer
Why not ask your employer for a paycheck advance? If it's a true advance of earnings to you, it should come at zero or very low interest cost. If you can get it, it's cheaper, and should be less hassle than a payday loan agreement.

Approach Your Creditors
Almost any responsible lender or business operator will be glad to hear from you before you default on a payment rather than after. If you owe money and can't pay it all right now, approach your creditor with an offer, and a realistic payment plan. And then do your utmost to stick to the plan, or if you can't, get back in touch to re-schedule your payments. Why would a creditor agree to this? - because the alternative is likely more expensive, and more hassle. The effect of a payment extension is that you've "borrowed" the money, often interest free.

Other Lenders
There are some lenders who compete in the same space as payday loan lenders. Not so many - but it's worth checking in your area if you want to avoid a higher cost payday loan. They will include some Credit Unions, some finance companies, and other companies offering loans specifically for military personnel, all with loans an substantially reduced interest rates, and possibly longer term than a normal payday loan. Take the time to check.

Religious and Social Service agencies
If it's a true emergency, check for services in your area. Naturally you would expect eligibility (e.g. income, nature of need) requirements to apply.

Prevention Is Better Than a Cure!
Get a budget! This is of course, after the horse has bolted, and you probably don't want to hear this right now. But if you want less stress and less borrowing costs, serious about a family budget and stick to it. Regardless of income, you can get ahead by living within your means, and by providing a small amount out of each pay as a saving for emergencies. It doesn't have to be a fancy detailed number-crunching exercise - just work out what you need to live on, quarantine that money from your pay into your spending account and save the rest. Save enough to cover emergencies e.g. $10 per week. It won't be fool-proof, or prevent the big disaster, but you might be surprised at how quickly your life will improve.

So next time, before you rush out for a quick, easy and expensive payday loan, just pause for a minute and seriously consider your alternatives.

George Davis is Manager of http://www.StreetLenders.com a leading on-line payday loan specialist. You can get budget sheets at http://www.streetlenders.com/smart_money.html

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