In this post I take a look at some of the ways you could pay off your payday loans. Payday loans are expensive and can be very difficult to pay back, especially with all the extra interest.
I currently owe money on several payday loans because I did not pay them back when I should have. However you might be able to avoid the same plight I faced. Well I suppose we can at least try!
Let’s take a look at some ideas.
Make drastic cuts to your normal expenses
Do whatever you can to pay back the payday loan. Trust me, it will be much easier for you in the long run. It’s certainly not worth ruining your credit rating for unless your credit rating is already ruined.
Make cuts wherever possible in order to get the money you need together. For example by cutting down your weekly food bill, walking to work instead of driving if possible, or cutting out the Friday night takeaway. If you have Sky or Virgin Media, try to negotiate a better deal. If you are lucky the cheaper rate will start right away and your next monthly payment should be cheaper.
Get onto eBay and sell something of value if you can. If you have a good mobile phone sell that, or if you don’t want to risk it on eBay use someone like Mazuma.
Work some overtime
See if you can get some overtime in before your next payday (assuming the payment doesn’t miss the cut off). Extra cash is always welcome. Especially when trying to escape the payday loan trap.
Avoid Rolling Over or Deferring your Payday Loan
Whilst tempting you will just be stuck in an endless cycle. The key thing to remember is you want to escape the cycle. When you roll over or defer your loan, you typically just pay the interest that was due for the month. This results in you being in exactly the same situation again the following month. It’s not a nice place to be.
Negotiate a Repayment Plan for your Payday Loan
You may be able to (and I stress the word may), arrange a repayment plan over three months. So for example if you are due to repay £300 on your next payday, you may be able to make three payments of £100 and then you are done.
A repayment plan is different to deferring because the interest should be frozen on your payday loan. However doing this may mean you damage your credit rating so it is important to consider this. The information will likely remain on your credit report for six years.
How I took control of my Payday Loans
For me it was too late. I had too many outstanding payday loans to pay back and the fact I had them was making my debt situation worse (I have a lot of other debt too). Every month I was paying hundreds of pounds in interest and I decided enough was enough. In the end I defaulted on all of them. In other words I did not pay them back, change bank accounts and waited for the debt collection letters (although I tried to set up repayment plans).
This was the best way for me to deal with the problem as my credit rating was already ruined and I knew what to expect.
Really Struggling with Payday Loan Debt?
If you find you are unable to cope with the situation then you should seek professional help as soon as possible. The link below provides information on organisations who can help you without charge.
My final words of advice are this. Do all you can to rid yourself of the payday loans you are trying to pay back. Then once you have done that, never take one out again. Instead, start saving up an emergency fund and hopefully you will be better off in the future.