Most times, it can be so frustrating when you have no idea of how to take care of those piling bills. Instead of running to friends and families, many prefer to take on payday loans to save themselves from ridicule from friends and families.
What is a Payday Loan?
A payday loan is a short-term loan with a very high-interest rate. It requires no collateral and is usually considered an unsecured personal loan, and does not consider the borrower’s ability to repay the loans. Instead, it only considers how much the borrower earns. Many people find it challenging to pay off payday loan debts because of the extremely high-interest rates, thereby getting stuck in a vicious cycle of debts.
Ways of Getting Out of Payday Loan Debts
Breaking free from the shackles of payday loan debt is not easy because of the high rate of interest attached to it and its short payment terms. Below are different ways you can opt-out of this debt cycle.
#1. Payday loan Consolidation
Payday loan consolidation means borrowing money to clear multiple payday loans. There are many options for this Payday loan Consolidation, and they include:
- Payday Alternative Loan (PAL): The payday alternative loan allows you to choose from two kinds of small loans: PAL, which is repaid in 1-6 months, and PALs II repaid within 1 year.
- Personal loan: here, funding is fast, often within one week, and requires no collateral.
- 0% APR Credit card offer: here, the borrower may be able to secure 0% introductory APR offers for up to 20 months without collateral.
#2 Payday Loan Relief without debt consolidation
While payday loan consolidation can be considered helpful, it has its downside: repaying debt with more debt. Considering this, many prefer to opt for a payday loan relief plan without consolidating debt.
The strategies to consider when choosing the payday loan relief plan include:
- Consultation of Non-Profit counselors about debt management: Non-profit counselors can help you weigh your options in addition to debt management plans to repay your debt.
- Asking for an extended payment plan from your lender: some lenders offer no-cost extended payment plans to borrowers with financial hardships.
- Borrowing from friends or family: Since payday loans are small amounts of money, it is better to borrow this small amount from friends or family instead of rolling over payday loans.
The bottom line
Since the payday loan is incredibly risky, it is advisable to avoid it entirely and opt for other options like asking friends and families for money, asking for a pay advance from your employer, or doing other side jobs for extra income. But if, unfortunately, you find yourself in this payday loan debt trap, you can always get out of it by using the payday loan consolidation plan or payday loan relief plan.
