How to Get Help with Payday Loan Debt Relief?

A payday loan indeed seems like an easy and quick solution in case you are short of cash and want to cover your immediate cash needs. But believe it or not, payday loans can be difficult to pay and can end up costing too high than expected. You know why? It is because these loans are small-dollar but high-cost loans that charge a triple-digit percentage rate annually. And payday loans are due to be paid within two weeks.

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Payday loans can often result in several ever-increasing and endless payments. The way they are structured might stick you in a repeated cycle of paying additional fees to renew the same loan again and again.  They can be overwhelming at times and asking for help is not always easy. Right?

But, don’t worry. As the saying goes every problem has a solution; pay-loan debt also has a solution. Here are some of the effective ways to get help with payday loan debt relief.

  1. Loan Consolidation

Payday loan consolidation – payday loan relief is to roll the outstanding loans you have at the moment into a smaller payment that you can pay in the future. You are borrowing again but at a lower interest rate. You then use the borrowed money to repay your payday in full and other debts you owe such as credit card balance. It makes it possible for you to pay much less amount on the loans that you have already outstanding.  The strategy behind this is to arrange predictable amount rather than escalating monthly payments that fit into your budget. Moreover, a lesser interest rate can make the total amount on the loans to the minimum.

  1. Peer-to-peer Loans

Many web-based lending sites do not always check your credit scores before approving a loan. But do you know that the sites require appropriate evidence of income and other assets? It can cause difficulty in loan approval specially for those with limited income or poor credit scores. However, you can visit lending sites that are web-based if you have a small loan amount. It is convenient to apply at multiples sites in a single session. If you succeed, then your loan amount will be transferred to your checking account in a few days.

  1. Debt Management Plan

You can also consider pursuing a debt management plan (DMP). With DMP, you will work with a certified credit counselor to form a debt repayment and budget schedule. The counselor will negotiate with payday lenders and creditors to accept less amount than the total you owe. They will negotiate lower rates of interest and try to stop a new penalty.  The counselor will examine your financial position, recognize areas to improve your credit score, and help you create a customized plan to pay your debt. They will make you qualify for an affordable credit whenever you need it. However, participating in a DMP demands to close all your credit card accounts and it is recorded in your credit report as well.

  1. Payday Alternative Loans (PALs)

PALs are created to meet needs that payday loans address at reasonable costs and repayment terms initiated by the credit unions. PALs are short-term loans that do not demand any credit check. They are used in place of payday loans but you can also use PALs to pay off a payday loan. PALs have a low rate of annual interest as compared to payday loan and you can repay it in equal monthly installments.  A time period of over six months is given to repay the PALs. You need to belong to a credit union for 30 days and pay an application fee also.

  1. Extended Payment Plan (EPP)

EPPs require payday lenders to let you repay your loan over an extended period at no additional charges. The time can extend to four weeks. Payday lenders who belong to the CFSA trade association offers EPPs to a borrower who is facing trouble in repaying the loan. It is always advisable to switch to the CFSA trade organization while taking payday loans so that you can get an EPP in the future.

Final Words

So, now you are aware of the suitable options that can help you with your payday loan debt. You can opt for any of the above to get out of the debt. Once you have escaped from the payday loan debt try to avoid them in the future.

Interesting Related Article: “7 Science-Backed Strategies for Getting out of Debt”