7 Tips To Pay Off Your Payday Loan Fast
Everyone desires to live a better life, and one of the best ways to start living better is to be debt-free. Many people have gone the extra mile to learn and master ways to clear their debts and improve their financial status forever.
They’ve utilised resources from the internet and any other available sources. However, not everything you come across is practical. Some of that information will leave you in a worse financial position.
If you received a payday loan and you’re afraid that you may end up in an endless debt cycle, this article is for you. We’ll give you seven tips to help you pay off your loan quicker.
1. Inquire About An Extended Payment Plan
You may request an EPP (extended payment plan) if you figure that you won’t be able to pay off your loan when it’s due. Essentially, an EPP offers you more time to clear your loan without attracting extra interest or fees.
Some loan lenders will accept EPP requests depending on your state. For example, lenders will offer you EPP alternatives in some states if you regularly take their loan products. However, it would be best if you had a clear plan on how you’ll pay your loan before even applying for one.
2. Find A Part-Time Job
Most of us have a plan on how to pay off our payday loans even before applying for one. But plans fail sometimes, and we find ourselves at our wit’s end trying to pay back the loan on time. Finding a part-time job to raise additional cash is one of the most effective counter-strategies you can implement to pay your loan faster.
But getting additional cash may extend beyond just finding a part-time job. You can also sell your old or unused stuff, such as clothes and furniture, on various e-commerce sites to raise extra cash. The idea is to get extra money to pay off your loan faster.
But if things get worse, apply for any payday loans Australia to pay off your current loan.
3. Cut Down Your Living Cost
Generally, living a frugal lifestyle if you have options is challenging, but it can benefit you financially. Living a frugal life saves extra cash by cutting down on unnecessary expenditures. For example, if you’re fresh from college and still financially well-off, you can live with your parents to save the little you can to pay off your student loan.
This approach can help you pay off your payday loan faster. You can re-evaluate your spending and avoid buying unnecessary or expensive items.
4. Consolidate Debt
Borrow what you need to pay off your current loan—or a bit more to prevent you from seeking another payday loan. Consolidating your current payday loans with a more affordable loan instead of renewing them is a strategic move. While this approach only transfers you to another creditor, your new loan should come with lower rates and better terms.
5. See If You Can Qualify for a Personal Loan
While payday loans are easy to access, they’re not the only loans available for you. You can use other loans such as credit card loans and home equity lines of credit (HELOCs) to pay off larger loans.
Credit cards, for instance, can give you cash advances. However, if your credit score is poor, you may have to try your luck elsewhere.
To qualify for most of these alternatives, you’ll need a good credit score of at least 580. You can find your credit transcript from credit bureaus such as Experian, TransUnion first, and Equifax. However, it would help if you were keen when dealing with credit bureaus as they’re becoming scammy lately.
6. Ask for a Pay Advance
If you have a close relationship with your boss, requesting a salary advance to pay off your loan can be a great idea. Most employers only give salary advances to employees they trust.
Be honest with your boss. Tell them the risk of paying your payday loan late to make them understand that the sooner you get the cash, the better.
Alternatively, you can offer to work for extra hours. This will not only solve your current problem but can also build your relationship with the employer.
7. Look into Nonprofit Credit Counselling
For many people, understanding financial concepts are not easy, and payday loan lenders have been constantly criticised for taking advantage of this. However, you can always consult a credit counsellor—a finance expert. The counsellor can help with interpreting the credit terms and principles; they can also give tips on escaping debt cycle traps.
But if you’re already in a debt situation, you’re most likely not able to pay credit counselling institutions for their services. Luckily, some nonprofit counselling agencies can help you without charging.
Organisations such as reform debt solutions offer various free credit counselling services. They’ll help you understand your financial options and help you design a strategy to pay your current loans faster.
While payday loans come with excessive interest rates, you can use different strategies to clear them off faster and avoid penalties. If you follow the tips above, be sure that you’ll repay your debts faster without hurting your finances. However, it is not a walk in the park, and you’ll have to be patient and disciplined to achieve the financial freedom you seek.
It is critical to consult a financial advisor before taking out a payday loan. A financial advisor will help you regain control of your finances and suggest a reasonable monthly budget tailored to your needs. This will help you prevent being trapped in a debt cycle.