How to Escape Payday Loan Debt in the Best Possible Ways?
Payday loans are the most disastrous of all debts.
If you have the means, then counter the line I just said.
I am going to list you several reasons, as of why they are something, you should never really aim to borrow.
Payday loans often times carry 300% interest rates! Isn’t that enough to keep you away from them??!
Payday loans have huge penalty fees, and many of these loans are traded by illegal and fraud companies. These lenders exist to loot your money.
It is not our concern, in this post, to make you aware of the deadly characteristics of payday loans. Instead, we are taking it a bit further and will discuss how you can clear your payday loan debt, if you are already trapped in them for quite a long time.
Hence, gear up and know in what ways you can escape payday loan debt.
To clear the debt in full, you need a good income:
It is a payday loan’s intrinsic nature to have sky-high interest rates. And, this is the sole reason that makes it so difficult to pay them off.
A $500 payday loan can easily become $2000 in a couple of months’ time.
Therefore, you should try to clear it in one blow. And, the only way to do so, is to have a nice income, that lets you accomplish the one-time heavy payment, while taking care of all your other monthly financial needs.
But, is this the only criterion to escape payday loan debt? Having sufficient income?
Well, believe it or not, I can end the post right over here, by telling you that “Yes, this is the only potent way to clear your payday loan debt. Get a good income, and pay off the debt in full, no matter how much heavy payment you got to make.”
If required, you can even take help from your friend and family, so as to compensate for the loss of the heavy chunk of your income, that you will suffer, as you make the payment.
However, this option might not be valid for many, as increasing your income, finding a well-paid job, or switching to a better job is not always an easy feasible option.
Still, if you feel that you can manage to get hold of that one-time heavy payment, then please do so without any hesitation. It is definitely worth the pain.
On the other hand, if you want to spread out the payment over months, then keep on reading what we are discussing next.
Arrange the payments based on interest rates:
Many of us have heard the debt avalanche method, which targets the highest interest debt as the foremost priority, in the debt payment schedule.
If you are not familiar with debt avalanche, then here I am breaking it down for you. First of all, this method is meant to tackle multiple debts.
So if you are having only one payday loan to pay off, then you have no need to follow a specialized payment structure. You can hence, readily go to the next points listed in this post.
In the meantime, let’s explain the Debt Avalanche for those of you, who are having multiple debts in the line, to pay off.
In this payment method, you have to arrange your debts as per the descending order of their interest rates.
Now, on the highest interest debt, you will be making extra payments, while maintaining the minimum payments on the rest of the debt accounts.
But, to keep in mind, payday loans are meant to be paid off on the arrival of your next paycheck!
Therefore, unless you pay the debts in full, in one month’s time, you will be continuously welcoming interest fees, that too of huge amounts!
So, returning back to avalanche, you keep on maintaining this format of escalated payment structure, for the highest interest debt.
Once this top priority debt gets cleared, you will be targeting the next high interest debt in line, and start to do extra payments on it!
You keep on following this payment structure till you have cleared all your debts in their totality.
Always try to have a budget in hand:
And, trust me, only you know which budget will work out the best for you.
A zero-based bare-bones budget, is the best one you can use for tackling your debts. Moreover, you will be using a budget, not only to clear debts, but also to alleviate your financial condition, by tracking monthly expenses, and expanding your savings profile.
Hence as the name goes, in the zero-based bare-bones, you will be listing all the expenses you have each month, including the debt payments and the amount you wish to save.
Then, add up the total expense list, and see if it’s canceling out your whole income. If the result of your Income minus Expenses, comes to zero, then the budget is successful. If after subtracting, you see that you still have some of your income left out, then you will have to put the remainder into some effective use.
Like you can do some more debt payments with the extra amount, or try to save the money for building wealth.
You must give savings a big priority, as you need to make sure that you don’t need to take out payday loans in the future. A good savings ensures that you don’t have to rely on debts for withstanding emergency or unplanned expenses.
Consider professional debt pay off options for payday loan debt:
At times, many people can’t clear their payday loan debt, and end up wasting loads of money in their dream to become debt-free.
That’s when these debtors become hopeless and lose the charm of life. Therefore you should responsibly take back your happy life by conquering debts.
And to speak it on a serious note, it is not quite possible to do so without professional help, that too if you are having multiple payday loans of big debt amounts.
By professional help, it is definitely indicated that you approach debt relief companies, or law firms, and let the debt experts handle the debt payments for you.
These professional debt relief options let you negotiate with the creditors and bring down the high interest rates, penalty fees, and even help you lower the overall debt amounts.
Therefore get payday loan debt assistance and have the professionals working along with you to grant you financial freedom.
So, here we are after all at the end of this post. It will take some hard work to clear the debts, but it’s worth it.
You don’t deserve to be in debt forever. Wish you a happy life ahead!