It isn’t uncommon to be caught in a pile of payday loan debt from multiple sources that you just can’t seem to get rid of. For one, payday loans have extremely high-interest rates and short terms, so you are in a time crunch from the first day.
Secondly, if you take multiple payday loans, the deadlines might get you confused and cause you to miss out on one of them. Once you miss a deadline, you are piled with an additional fee that adds to the mountain of debt. And the struggle continues…
However, there are ways to avoid payday loan debt, and even if you accumulate debt, consolidation can help you eliminate it.
Payday Loan Debt: 5 Ways to Avoid it
Here are five ways you can avoid payday loan debt:
1. Consider Consulting Your Friends and Family
Payday loans have extremely high-interest rates. Before you decide to take a payday loan, consider talking to your friends and family and asking them for advice. Have an honest conversation with them about your finances and ask them if they think a payday loan is the best option for you.
Your friends and family may give you unfiltered advice about whether you should opt for a different kind of loan, considering your current financial conditions, your past history with managing finances, and your upcoming income.
2. Evaluate Your Own Financial Situation
Payday loans are a huge commitment. The huge interest rates alone are a big issue for people who don’t understand the value of financial management and literacy. You must evaluate your own financial situation and understand your history with finances.
For example, consider whether you have overspent or saved over the past few years. Ask yourself if you have had trouble keeping up with your bills in the past or have many other pending payments and loans to pay. This will give you a better idea of whether to get a payday loan.
3. Make Those Payments on Time
It is important that you make payments for payday loans on time to avoid payday loan debt. This can be easily fixed by setting up automatic payments or simple reminders on your phone. The earlier you pay that debt, the better it is for your credit score and the lesser the chances of an extra fee.
If you are late by chance, consider asking your creditors to give you an extension and requesting an exemption from the late payment fee.
4. Speak to Professionals
It is important to speak to a professional who is educated in debt. This allows you to get educated in financial literacy. Solid Ground Financial can help you understand your debt according to your personal situation.
With a financial advisor, you can get a much better understanding of your personal situation and get the financial advice you deserve.
5. Start Saving
Having an emergency fund and working on it as soon as possible is essential to avoid payday loan debt. With a poor credit history and piling debt, you may not be able to save as much as you would like. However, you can save earlier when you aren’t caught up in loans.
Emergency funds can help you meet crisis situations. You may not even need loans in emergency situations. Even a small fund can assist you with smaller home repair requirements. Although payday loans aren’t a great idea for people with financial problems, you can easily manage them if you have emergency funds available, as this means you have enough financial literacy to manage this loan.
How Consolidation Can Help
If you are caught up in a cycle of payday loans and have multiple accumulated loans ruining your credit history, debt consolidation can help.
Payday loan consolidation helps you:
- Save money in the long run by paying for one loan with a lower interest rate.
- Consolidate your debt which makes it easy to keep up with the deadline.
- Make it easy to manage all of your finances and avoid a large debt.
How to Consolidate Debt
Here are some easy steps you can take to consolidate your debt;
- Start by considering how much debt you have accumulated by making a list of all of your loans. This includes your credit card debt, installment loans, and payday loans. Include the total amount you owe to make it easy for a final estimate of how much you need to pay.
- Choose a source that can help you with your debt consolidation. This includes credit cards, personal loans, unsecured loans, bank loans, etc. It is important to refer to a reliable lender, such as Solid Ground Financial, to consolidate your debts.
Apply for the consolidation of these loans in a two-week period to avoid more than one hard inquiry on your credit report. The more hard credit inquiries, the more the credit score drop.
Final Thoughts
A payday loan debt consolidation can help you get your finances in order. If you have accumulated multiple loans over the years, it can help you organize those loans and pay them off in one go. Following that, you just need to deal with one loan.
That is a lot easier than dealing with multiple deadlines and late payment fees. Solid Ground Financial gives you the best advisors to help you get your finances in order. Contact us today.
