One of the more difficult types of debts to deal with are Payday Loan Debts. The problem with Payday Loans is the amount of interest charged, it becomes very expensive very quickly. The other problem with a Payday Loan is paying it back the following month. When you take out a payday loan and things are tight this month how will it affect your finances the month after?
Some borrowers will borrow from another payday loan lender to pay back their first loan. This costs an absolute fortune. The month after that they then find they can’t pay the new payday loan, so they might roll over or defer the loan to the following month. It’s a bit like kicking a can down the road. you will eventually catch up with the can and you either kick it again or pick it up.
Things can quickly go wrong from there and before you know it you could owe money to several payday lenders as you are trying to stay afloat in a sea of payday debt.
How can you escape this trap?
The first thing you should do is to stop borrowing. Payday Loans are expensive and in most cases only add to your problems. You could look at some ways to pay back your payday loans, either by making some drastic cuts or maybe by selling some stuff on eBay to make some money.
The most obvious answer is to not take out Payday Loans. However we do, I have done as well and so our situation is what it is. Let’s say there is absolutely no hope of you paying back your payday loan, what do you do then? The only thing you can do in that case is to set up a repayment plan. That way you could repay the loan over several months and get the interest and charges frozen.
However there is a downside, your credit rating will be affected and the lender may attempt to debit what’s owed from your account leaving you with nothing. You can stop this by cancelling something called Continuous Payment Authority. The two links below can help you.
What else can you do to survive Payday Loans?
Let’s say that the above seems too overwhelming. If it does then you should seek professional help from the Debt Advice section on this blog. On that page you can find out about different debt solutions and contact an organisation who can help you. Good luck with sorting out your Payday Loan Debts.