How to Pay Off a Payday Loan

Let’s face facts. If you’re taking out a payday loan, it’s because you’re broke and out of other options. Unfortunately, that also means, at least in most cases, that there isn’t an ice cube’s chance in New Mexico that you’re going to be able to repay the loan on pay day and still be able to live for two weeks on what’s left of your pay check. At the very least, that’s the situation most cash advance customers find themselves in.

So, What Do You Do if You Need to Reloan?

 

Let’s start with what you don’t want to do. You definitely don’t want to reloan for the same amount that you borrowed in the first place. That starts an endless spiral into all kinds of financial problems. Re loan only as much as you absolutely need.

Make a Plan and Stick to It.

 

Whether you lower your loan by $200 each time or $25, borrow less every time you re loan. That’s the only way you’re ever going to get out of the hole. Even if it takes six months to pay off your cash advance, it’s better to at least make some progress. Make sure you borrow less every time you re loan. If that advice is beginning to sound like a broken record, good. Now do it.

Once You’re Out, Make a Plan to Stay Out

 

OK, no more excuses on this one. If you could afford to pay a payday loan place the interest on $500 every time you get a paycheck, then you can afford to pay at least that much to yourself. Start a savings account. In no time at all, if you leave the money alone until you hit a genuine emergency, you will have a nest egg built up that will prevent you from every having to take a payday loan again.

An Even Better Plan

Another thing you could do with the money you should be “paying yourself” is split it in half. Put half of it in a savings account, as in the plan above, and use the other half to pay off the old bills and debts that caused you to need to turn to a cash advance store in the first place. If you are unsure about how to go about paying past bills off, there are many credit counseling services available, many of them willing to help at no direct cost to you.

You Can Do It

 

If you’re in a bad situation because of a payday loan, don’t feel bad. You’re not the first person to find themselves in that situation, and you won’t be the last. It’s not so important where you are right now. What really matters is which direction you’re headed. You can get out from under this, with a little help and discipline.

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