3 Helpful Advices
A payday loan can help individuals meet essential expenses in case of a cash shortfall until their next pay day. However, a problem with these loans is that you can easily become stuck with the loan. This is particularly the case when you take on more than what you can afford to repay.
A $300 loan having $45 dollar fee may not seem to be much at first hand. But if you do not pay the loan amount when it’s due, the net payment amount can turn out to be a huge sum over time. In some cases, the finance charges build up to about double the actual loan amount. For instance, if the loan becomes unpaid for over a year you may have to pay about $540 finance charges on the $300 loan.
If you are facing a similar predicament, you need to make a plan to get out of the debt hole. Here are 3 helpful tips on how you can get rid of the payday loan debt burden, and avoid defaulting on the loan.
1. Create a Budget
The foremost advice to reduce payday loan debt burden is to create a realistic budget. The budget should be made with the goal of setting a maximum amount of money for repaying the debt. The quicker you pay the loan due amount, the lower will be the financial charges that you have to pay on the loan.
When making a budget you should focus on expense categories that you can sacrifice without significantly reducing the quality of your life. For instance, instead of eating out every other day, you can limit it to just once a week.
Also, you can save a lot by limiting the budget for digital entertainment such as net, movies, and video games. You should also consider going to less expensive places on the weekends to cut the monthly expenses. In this way, you will be able to all to allocate enough amount of paying the loan that will allow you to get out of the debt hole.
2. Consider Extended Payment Plan (EPP)
An Extended Payment Plan (EPP) allows you to increase the repayment period and thus reduce the debt installment burden without a penalty.
The plan can greatly help in easing the debt payment burden and allow you to get your finances in order.
However, you should keep in mind that not all payday loan lenders offer Extended Payment Offer. Some of them may impose restrictions on who can avail the option. Check with you payday loan lender if they offer the plan to ease the payment burden.
3. Consult a Professional Credit Counseling Agency
The third important advice to lower the payday loan debt burden is to contact a professional credit counseling agency. The expert counselors can help you figure out tactics to repay the loans. They allow you to explore practical options such as payday loan consolidation to ease the debt burden. The fee paid to the counselors will be less as compared to the value you will get in easing the debt burden.
By following the above three tips you can ease your payday loan debt burden. Just remember that a payday loan is like a double edge sword. If used correctly, it can help you meet essential financial expenses. On the flip side, if you don’t take care when availing the loan, you can easily find yourself stuck into a deep debt hole coming out of which will be difficult. So, you must use this option wisely.