Did you take out too many payday loans each time you went through a temporary credit crunch? If answered yes, you must be finding yourself in a financial mess and looking for ways to repay your debts as soon as possible. If the lenders from whom you’ve taken out the payday loans are legal in your state, you’re supposed to repay both the principal amount and the interest rate. During such a situation, if you find yourself falling short of funds, you can go for debt negotiation with your payday loan lenders. Though there are debt settlement companies that can assist you in doing the job, you can do this on your own too.
Here are some steps that you can consider:
Make a list of the total debt amount
The first step that you need to take is to make a list of the total debt amount that you owe. Unless you know how much you owe and how much you can repay with your present financial affordability, you’ll not know what steps to take to reduce the debt burden. You should know the interest rate and the principal amount on all the accounts so as to make the entire process successful.
Save enough money to make the payments
When the lenders waive off a certain portion of the payday loan balance, the debtor has to start making the monthly payments. If you don’t have enough money to pay back the amount, you’ll hurt your credit score badly and thereby be considered as a bad debtor. Therefore, save enough money so that you can repay on time.
Negotiate with your lenders
You can negotiate with your lenders and tell them about the exact financial hardship that is making you fall back on the monthly payments. You should negotiate with the lenders so that they know your issues and agree for settlement. Tell them the truth and also establish the fact that if they don’t waive off a portion of the balance, you may not be able to repay the entire amount.
Write a debt settlement letter
Sending debt settlement letter is one of the important steps if you want to settle your payday loan debt on your own. You may accompany your request with a debt settlement letter so that this may impress the lender. You have to mention the total debt amount in the letter. However, you should also mention the reason for falling back on the monthly payments, and the amount that you can afford with your present budget.
Start making the monthly payments
As soon as your lenders waive off a portion of the debts, you have to start making the monthly payments on the loans. Thus, you don’t default even after your debts are settled. Just make sure that you pay them on time.
Lastly, enrolling in a debt settlement program is expensive. So, you can try to settle payday loan debt on your own. However, you should negotiate properly to make your lenders agree about the settlement.