The most essential payday loan management you need to know!

Payday loan amounts are low, but people still find it menacing to pay off!

The reason is inevitably the high-interest rates and the continuous renewal fee structure, most borrowers fall into.

Real life cases go like this. You borrow some $500, but end up paying $2000 at the end of a year. Payday lenders do their math intentionally to receive as much profit as they can from these small amounts.

So, even if you fail to give back the principal amount you borrowed, they can still make a 100%-150% profit by charging you abrupt interests and recurrent loan renewal fees.

Hence, if you are struggling real hard to come out of a payday loan cycle that you can’t escape by any means, then here is the essential payday loan debt management you need to pay attention to.

What is payday loan debt management?

People search a lot about how to manage payday loans with the help of debt management. But, to tell you the truth, there is nothing as such in reality as a payday loan debt management.

We have therefore decided to break the ice and create something that can suffice as the term itself.

Moreover, in the end, debt management is indeed all about managing and paying off debts. Be it credit cards, equity loans, personal loans, or even payday loans.

So, payday loan debt management is a unique customized approach towards paying off payday loan debt, which can surely include debt consolidation as a subpart of the process.

But the essential factor is, payday loan management first demands a total withdrawal from renewing the loan!

If your debts are getting delayed, then let it be, there’s absolutely no point in renewing the loan everytime you fall short of cash.

Let it get suspended for good, while you focus on building the amount required to pay off the debt in full.

Doing payday loan debt management including consolidation as a subpart:

A very straight forward process with barely any twist or turn. Only, things can get a lot better, if you can negotiate the loan amounts and the interest rates with your payday lenders!

It’s pretty easy actually, this negotiation thing. You can do that yourself, or you can take help of law firms and experts.

Once you reduce your debt amounts and the interest rate along with, then trust me that will count as a big profit and savings at your end.

So, if you plan to include consolidation, then you will have to find the best tool to bring all your debts together under one roof amount.

There are many ways you can do that. You can either build up your own personal savings, or take out a personal or consolidation loan, or you can use your credit cards.
It depends, however, whether or not all payday lenders and credit card companies will allow you to pay off payday loans using credit cards.

Most importantly, if you have the ability to pull out a HELOC, or a Home Equity Loan, then please don’t use them to pay off payday loans!
You will just convert your unsecured and unimportant payday loans into a full-throttle secured debt.

The best decision will always be, using an unsecured debt to pay off another unsecured one.

Therefore, finalizing all the requirements, you need:

  • One big unsecured/consumer debt under which all your payday loans can fit in.
  • A good negotiation with lenders, that can help to reduce your overall debt amounts.
  • A nice payment structure, where you will make payments in correct proportions to all your lenders.

But at the end of the day you will have to pay back the new debt. So, make sure that this debt carries an interest rate much lower than your payday loans.
You should be able to save money in interest payments, otherwise, it won’t make much difference at all!

In the meantime, if you want to cut all the hassles yourself, and don’t want to take out another debt, then you can take help of a debt consolidation company. They will let you do one single payment, which they will disburse to the lenders as per a payment agreement.

Doing payday loan debt management with help of a budget and lifestyle changes:

Eventually, you can also plan a budget, and with its help, pay down all  your payday loan debt.

Here you won’t have consolidation involved. All you need are two things:

  • A budget, to arrange your finances.
  • A payment strategy to help you save money and pay off debts in an orderly manner.

For a budget, it’s best you go for the conventional and simple 50-20-30 budget. Plan on to have 50% of your salary for daily necessities, utilities, and household costs.

30% of your income, you push towards the loan payments. The rest 20% you can use for building savings, or if applicable do some extra debt payments!

Now, you would never know how much payment to do for which loan, unless you have a payment format or strategy in hand.

For a debt payoff strategy you use the debt avalanche. In this, you pay down the highest interest debt first by making extra payments.

All you have to do in debt avalanche, is arrange the payday loans in the descending order of their interest rates, to get a clear picture of which debt to hit first.

Then one by one you take down all of them. But, consider one thing, that payday loans are hungry, and if you don’t pay them off as fast as possible, they will only grow bigger by feeding on the interest amounts.

As of lifestyle changes, cut down unnecessary costs as much as possible, till you come clear of all your payday loans. Frugal living is pretty easy and by doing it the right way, not only you will spend less, but also you can plan for big events in the future, like a trip next year or a grandiose family get-together!

What if you only have a single payday loan to pay off, but of a big amount?

In such a case it’s always best to take help of a debt settlement company and settle your debt with a lump sum amount.

Payday lenders are desperate and fierce (plus some are illegals too). You really don’t wanna play in the muck.

Here are the top 4 debt settlement companies to help you with payday loans:

  1. New Era Debt Solutions.
  2. Oak View Law Group
  3. National Debt Relief
  4. Freedom Debt Relief

The companies also provide online debt consolidation and settlement services. So, they can help you out for other debts too. And, you can do the whole thing while sitting at home.

Believe, you now have a good grasp of the payday loan debt management, which you need, to unlock the debt cycle you are trapped in.

Once you are done paying off the payday loans, make sure that from the next time onward you try out other payday loan alternatives, instead of going for these high-interest loans. A life without payday loans is the best thing you can have.