Reduce Your Payday Loans in 12 Steps

If you have been looking for a way to reduce your payday loans, then this blog post is perfect for you. In it, we will discuss 11 steps that can help you get out of debt and avoid the need for consolidation. Payday loan consolidation is one of the most popular options when trying to consolidate debts. Still, there are many other ways to repay lenders without having to take on another loan. We hope this article helps make your life easier!

Steps to reduce payday loans

1. Stop taking out new Payday Loans

The first step to reducing your payday loans is to cut up all your cards and stop applying for any more credit. The goal of this step is to stop digging yourself into a deeper hole of debt by reducing the amount of interest you are currently paying on multiple loans (As well as reducing the risk that you will take out even more new payday loans). You may also need to reduce or eliminate other forms of non-payday debt, such as your monthly bills for electricity or insurance premiums.

2. Make a commitment

You need to be fully committed if you want to pay off your payday loan consolidation successfully. This means not allowing yourself to slip back into borrowing money every time something goes wrong. You can accomplish this best by avoiding anything that makes you feel tempted to take out more payday loans, such as friends who encourage you to spend money or negative music/movies about greed and the misery of being poor.

3. Stop thinking short-term

One of the biggest reasons people have so much trouble reducing their payday loans is because they only look at the problem in the short term. Instead, you should be looking for ways to reduce your loan over its entire lifetime. For example, think about how much interest you are paying now on your balance compared with how much interest you will pay if you can double your monthly payments. This strategy is often referred to as “Snowballing” Debt because each payment you add to your balance will help you reduce interest on that debt and set yourself up for additional payments in the future.

4. Find ways to save money

The best way to get out of debt is to find ways to save money. One example would be putting any extra money into a savings account only for your payday loans. When you get paid, but whatever amount of money you can afford into this separate savings account instead of spending it on other bills or frivolous things. By paying yourself first, you are ensuring that at least some additional money goes towards repaying your creditors rather than being wasted away on ‘luxuries.’5. Use the “Debt Snowball” method

  The snowball method almost always works better than trying to pay everyone off at once. Each month you should focus on repaying the payday loan with the lowest balance and work until you have eliminated them all. If this is done correctly, it won’t take very long before your debts are paid in full because most people pay excessive interest rates on their loans.

6. Make additional payments

Even though many lenders don’t allow for an online repayment schedule, there are always ways to spend extra cash to various creditors without going through a lot of hassle. Most financial institutions require that you write a check or include a payment stub with any correspondence. Still, if your lender accepts electronic payments, you may be able to avoid postage fees by using an online bill payment system like PayPal or Dwolla.

7. Request a fee reduction

If you think your credit report is the main reason you are currently paying so much in interest, consider asking for a fee waiver. It may take several requests before they agree to reduce your rates, but if it works, it can save you hundreds of dollars every month. This method usually only works if you have an excellent credit score and an overall healthy financial situation.

8. Negotiate with the lender

Many people get frustrated when they get denied by their creditors, but this can often be avoided by simply sending them an email or making a phone call to ask what kind of deal they would give if you pre-paid some of your loan (This is also called settlement). If the lender agrees to accept a smaller amount than you initially owed them, they will stick that difference into savings for you and apply it towards your original balance.

9. Stop taking out new payday loans

  Another problem many borrowers face is constantly borrowing more money just to pay off their old payday lenders. One of the best ways to eliminate this cycle is by refusing additional loans , even if they offer you free money or interest rates as low as 1%. Instead, save up some emergency cash until you can afford to repay your consolidation loan in full, at which point you can consider applying for another one if necessary.

10. Request an extension

If none of these methods work, then ask for an extension! Many people are surprised when the lender agrees since they will have to pay more interest in the short term, but it is always worth asking. As long as you provide a legitimate reason for your request, most lenders will be happy to oblige, and this can often give you the time you need to get back on your feet.

11. Take out a debt consolidation loan with lower rates

  Once you have gathered all of your debts together and consolidated them into one manageable monthly payment (hopefully with a lower rate), do everything you can afford to make that first payment during the grace period included in your contract. After that initial payment, set up an automatic withdrawal from your checking account so that each month another amount gets added onto what you owe until it is paid off or minimized.

12. Don’t take out any more payday loans unless necessary!

  The best way to handle consolidation is to use it as a tool for staying out of debt. Suppose you fail to do so and continue borrowing money from multiple companies at once, making each monthly payment will feel like taking two steps back for every one step forward. Avoid falling into this trap by vowing never to borrow another payday loan again unless necessary, and rest assured that with hard work, you will be able to pay them all off in the not too distant future.

About Patricia Kilgore

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