Almost 75% of employed citizens have been a victim of Payday Loan traps. Evaluating how much you have to pay at the end of your loan term, you will discover that you are paying more in interest rates and service charges than your principal loan amounts. A lot of individuals I’ve known who know about cash advances declare that once you get in loans, there is no turning back. I completely disagree. I believe that if one stands firm and responsible, he can recover from his debts and say goodbye to loans.
There are lots of companies offering loans to consolidate and pay your outstanding loans. Beware! This is not 100% effective; instead, it can sink you deeper in the mess you are in right now. Paying your debts with another debt is not the answer.
Taking the first step, one must realize that he needs to be responsible in handling money matters and be disciplined enough to stick to his plans. You need to set a goal, and in this situation, your goal must be getting rid of all your loans.
Draft a loan table.
Take note of your principal loan, the duration and the total amount you will have to pay at the end of the loan term. Take into consideration the interest rates and possible service charges.
Consider payment terms.
There are lenders who consider payment options like installments. Talk to your lender and be honest and straightforward in discussing the terms. This will help to reduce your burden in paying off, at the same time ensuring the lender that you will be able to pay off your loan.
Plan a budget.
Take your monthly income and deduct your expenses, making the loan on top of the list of expenses. You should then take action on how to spend what’s left of your pay. You have to have discipline in sticking to your budget if you really want to get out of loans.
Pay more than what you owe and pay early.
Don’t wait until your payment is due before you pay. If you have extra cash don’t think where you can spend it. Remember that you are in the middle of recovering from financial debt. That thing can wait until you have earned extra which is enough to buy it. Pay all your dues first. Going back to your extra cash, paying it to the debt you owe will shorten the loan duration thus minimizing interest rates and service charges.
Minimize your loans and earn extra.
No one told you that paying your debt is instant. If you have to apply for another loan, do it for a smaller amount until the day comes when you don’t need any loan at all. Try augmenting your budget by doing other jobs like online jobs which you can do during your free time.
Save for cushion money.
Create your own payday loan after you have paid off all your debts. Save a portion of your earnings as cushion money. So the next time you need immediate cash, you have that cushion to fall to. Remember to pay your cushion savings!