How to Get Out of Debt Faster

When we apply for payday loans, we commonly do it because we experience an urgent, emergency need for money. We urge to solve the financial issue asap, feeling too worried about the injury, car accident or breakdown. However, the debt is to be paid back in 14 or 31 days, otherwise the interest rates, the fees and penalties may be enormous. Thus, the planned paycheck amount is commonly not sufficient for paying out the debt and all the current expenditures, including foodstuffs, rent, childcare products and all the other necessary purchases. How to save the situation?

The Ways to Pay the Loan Back on Time

According to CFPB (Consumer Financial Protection Bureau), payday loan is a short-time, high-interest credit that is due on the next borrowers’ payday that is within 31 days. The loan amount is commonly not more than $500, and it is commonly granted within 24 hours.

Meanwhile, high-interest loan nature commonly makes borrowers look for the other money sources. Being delayed, debt may multiply enormously. Depending on the lenders’ state registration and license, the APR (annual percentage rate) can reach 400%.

So, to get out of the high-cost debt:

  • study all your available loans and credits;
  • prioritize the debts, paying the greatest attention to high-interest ones;
  • ask your lender for a special payment plan;
  • refinance with a cheaper loan or credit;
  • apply for an alternative loan;
  • ask for debt assistance.

It’s always great to refinance a high-interest loan with a cheaper one, for example, with a personal installment loan. However, payday loan is short-term, so, the time is limited and your credit report will already contain the information about at least one existing loan. You can negotiate with lenders anytime, asking for an extended payment plan, and the response will be commonly positive. Finally, ask a credit counseling agency professionals for assistance and solutions. Meanwhile, the best way out is to play your family budget properly, avoiding repeated, high-cost debts.

How to Manage Budget Wisely?

When we are to eliminate the debt, the best solution is to revise a budget, increasing income or decreasing expenditures. When it refers to a short-term period that does not exceed 30 days, we may get a small money amount by:

  • making a garage sale;
  • borrowing some cash from our friends or relatives;
  • applying for a second, part-time job;
  • taking out cheaper loans.

When we really need several hundred dollars immediately, the idea to sell some unnecessary items online seems to be perfect. Additionally, the expenses are to be scrutinized. According to the Economic Policy Institute (EPI), the largest ones are for rent or housing, utilities, education, healthcare, food and transportation. Commonly, they are important and cannot be ignored. Alternatively, minor expenses such as impulsive purchases of clothing, footwear, fashionable accessories may be eliminated or, at least, reduced to a minimum.

The financial experts recommend tracking the budget monthly, analyzing it and drawing conclusions. Meanwhile, when a payday loan is to be paid back right now, it’s recommended to look for all cash sources, such as tax refund, borrowing from friends, selling your personal items. The debt is to be paid off on time, otherwise, the interest and fees may become too high, involving your family in a debt cycle.

Apply now