When you don’t have enough in savings to cover an emergency repair, a payday loan can be a real life saver. Problems arise, however, when borrowers do not understand the repayment terms or decide to use their next paycheck to pay for something else rather than repay their payday loan debt. Are you in over your head? Here are five ways to get help with your payday loan debt.
Seek Payday Loan Debt Consolidation
Rather than continue to pull out additional payday loans, look into payday loan debt consolidation. Companies who specialize in debt consolidation often work with your payday loan lender to come up with a payment plan that works for you. It might mean having the payday loan company agree to reduce your debt so that you have less to pay back, or you might get longer to pay with monthly payments you can afford.
Talk to Your Local Bank
Some banks now offer their own versions of payday loans and the interest is much lower than a traditional payday loan. With lower interest rates, you may be able to get the money you need to pay off your existing payday loan debt, but your payments will be much lower and easier for you to manage.
Do You Attend Church?
A number of churches have started offering programs to their parishioners that help them get out of debt. The church partners with an area bank or credit union and offers low- or no-interest loan products to help church members pay off their payday loan debt. In most of these, the church puts up collateral to help you get a debt consolidation loan that you can afford. Not every church offers these programs, but it never hurts to ask.
For one woman in Virginia, her payments went from having an APR of 300 percent to one that had an APR of 6 percent. To find out if your church offers financial assistance, ask about the Jubilee Assistance Fund.
Trim Your Monthly Expenses
Every penny helps when it comes to paying back payday loan debt. Start looking at your monthly bills and see what you can scale back or cut completely. Start with your cell phone. There are no-contract plans that are much lower than traditional contract plans. Plus, if you must cancel your service, you do not face fees for cancelling a contract.
You might also be able to drop your cable and instead use services like Hulu or Netflix. If you still have a landline in your home, companies like Vonage charge a fraction of what traditional phone companies charge for phone service.
Sell Unneeded Items
Finally, hit up Craigslist or hold a garage sale and sell your unwanted or rarely used items. You might not earn enough to pay off all of your payday loan debt, but every little bit helps. If you have a food vacuum sealer sitting around that never gets used, people are willing to pay for items like that. The car you bought to fix up and then never found time, the DVDs you never watch, and furniture sitting in storage that never gets touched are other items that can bring in cash you need to pay off your payday loans.
