When you are desperate for money, a payday loan can seem like the best thing that can ever happen to you. They are very easy to approve, there offices are on every other corner and the staff is not concerned about asking a dozen of nosy questions.
There is a catch though! Pay day loans can haunt you for eternity. The emergency that made you take a pay day loan might even be over, but to keep your accounts balanced, you find yourself renewing your loan. With the high interests of pay day loans, you can fall into further debt hence it’s only logical that you end the renewal cycle and run away from the grasp of the lender. Below are tips on how to get out of payday loan hell.
- Note down when the payment is due
Of course, the simplest way of stopping the pay day horror is simply paying back the loan. By default, you are supposed to pay your loan on your next pay day. Postponing the payment can be suicidal hence it is wise to pay the loan as fast as possible.
- Determine how much you owe, and how much you will be required to pay over time
In your spreadsheet, make a table indicating the loan principal amount, the interest fees, and the total amount of money you are supposed to pay at the end of every loan period. In the event that you don’t pay your loan back, it might cost you an interest of 400 percent or higher if the loan was to be repaid in full. Look at this step as a motivation, but not as a way of scaring the hell out of you.
- Make a payment plan
In most cases, your lenders have a way of setting up a payment plan if they have re-loaned you a number of times. Be sure to enquire the requirement of this option and then go ahead to do all that it takes to set up a payment plan. Additionally, it would be helpful if you calculate how long the plan will take and how much money it will cost you over that period.
- Make a budget
When it comes to financial management, the importance of a budget cannot be overstated. Of great significance, making a budget is not hard. On a blank piece of paper, list down your monthly income in one column. Besides the monthly income, make another column listing down your monthly expenses. To make your budget explicit, you can look at the bills of the previous month. Next, look at any possibilities to cut back on your budget. Apply the difference you get to your pay day loan.
- Talk to a financial advisor
In the event that you are having a hard time managing your funds, finding professional advice is one of the greatest ways to avoid the predicaments of taking a pay day loan in the future. There are innumerable counseling agencies that will charge you a very small amount of money, some will charge you nothing at all. Search on the internet for any financial of credit advisor in your locality.