Do you want to try a payday loan, but want to know the best way to pay it off first?
Sometimes, payday loans can be the best option for an emergency situation. Although in most cases, you’ll want to avoid payday loans all together. Being in a situation where you need a payday loan is never great. You can combat this by creating streams of passive income. There are so many passive income ideas that you can use to generate more income for you and your family.
When you take into consideration the long-term interest rates from banks and credit card companies, a payday loan could really save you in a pinch.
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However, you still have to pay them off. Luckily, we found four of the best payday loan payoff tips to help you get that loan taken care of.
Check out what we found!
Four Tips For Paying Off A Payday Loan
When the payment period is up and you need to pay your payday loan, these tips can help if you’re short.
#1. Talk To Your Lender
The first thing you should do if you’re short on your payday loan repayment is to speak with your payday lender.
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Some lenders have hardship programs for specific circumstances that you may be eligible for.
For example, say you were laid off or fired from your job after taking out the payday loan. A lender may be sympathetic and will extend your loan repayment period or reduce the fees accrued.
There’s no harm in asking. If they can’t help you, there are other options as well.
Consolidating a payday loan is difficult, but certainly not impossible. This option may work for you.
You can consolidate your payday loan through another financing source or lender, or through a debt consolidating program.
Through a lender, you can take out a personal loan with a lower interest rate, or at least an extended repayment plan, to cover the payday loans that are getting out of control.
#3. Reduce Your Expenses
This tip is pretty obvious, but it’s the planning portion of expense reduction that can really help you pay off that payday loan.
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Take the time to sit down and make a list of things you can reduce spending on. We always think of the major stuff like power, water, rent, etc.
You should also consider smaller expenses like your phone plan, cable plan, transportation, and other factors that you can tangibly reduce in order to pay off your loan.
You’d be surprised at what could save you money.
- Got a subscription to a magazine?
- A monthly delivery box?
Take care of you payday loan first and cancel these things.
#4. Put It On Your Credit Card
This should be your last resort because credit card debt can be pretty scary too.
However, interest is typically much lower for credit card payments than payday loans. And the payment periods are much longer, too.
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Many credit cards have an option for cash advances in case your payday lender only accepts cash payments.
Remember that cash advances typically have a hefty fee, so do your best to figure out if using a credit card will actually cost you more.
Pay Off That Loan!
Did these useful tips help you pay off your payday loan? Tell us your story in the comments below!