For those suffering from financial emergencies or who need funds to get through the rest of the month, payday loans are a solution that more and more people are turning to. While payday loans certainly have a stigma attached, improvements and regulations have brought around fairer rates and more manageable repayment plans.
That being said, it’s easy to get into trouble with payday loan debt. That’s why the average payday borrower spends $520 fees to borrow $375. So you must know exactly you plan to pay back your payday loan debt before even thinking about taking one out.
Here, we’ll take you through the exact steps to take to ensure you use payday loans properly and don’t fall into the payday loan trap. Read on to find out more.
Prioritise Payday Loan Debt
Prioritising your debts is something that you should do as part of your regular budget but if you come to the point of needing a payday loan, prioritising these payments can help you ensure that it’s paid back on time. It’s important to pay back the minimum amount to all of your debts to prevent rising interest fees or potential penalties for missed payments, but with excess cash that you may have, directing this towards your payday loan repayments could help you pay off what is owed much more quickly.
Only Take Out What You Know You Can Pay Back
When you come to take out a payday loan, it may be tempting to take out the highest amount, especially when you’re in a tough situation. Despite this temptation, you should be realistic with your chosen amount. Only take out what you can afford to pay back in the given period to avoid the interest rates causing your owed amount to grow beyond feasible reach. Regular, scheduled payments that you can realistically afford will ensure that you keep out of financial trouble during your repayment period where possible.
Put Together A Debt Plan
A debt plan could be an ideal solution to all of your debts and will at least help you to get organised with your repayments. Work out what you need to pay and to where, what you’ll have spare, and whether that spare money is best going towards your payday loan or another outgoing cost. This plan will help you to organise your finances and with any luck, help you stick to it too! Whether you write it down on paper, put together an excel spreadsheet or use a mobile app, why not give it a try to see if it works for you?
Get Professional Advice
If you reach a position of needing a payday loan, getting professional advice for managing your finances overall could help you organise not only the repayments of your loan but your overall funds every month. There is plenty of free advice available out there for you to use, and your payday loan lender, by law, should direct you to a free source of advice.
When it comes to payday loans, those that look past the stigma may find that they provide a solution to short-term financial emergencies, but knowing how best to pay back what is owed is important. Organising your finances and ensuring that you have enough to pay back the loan and regain control over your funds may ultimately help you pay off not only your payday loans but any debts that you owe.