How to Get Relief From a Payday Loan

A payday loan is an advance that a private company provides to consumers on a short-term basis. These types of loans can be very dangerous as the charges and fees associated with them can compound over four times the amount in a matter of months. These types of loans are considered emergency cash loans to consumers, who should pay them back within a few weeks. However, for many consumers caught in the payday loan cycle, repayment in full can be a very difficult proposition.

Instructions

1

Contact the payday loan lender and discuss repayment installment plans. While this will not negate the inflated charges and fees associated with a payday loan, it can make repayment more manageable for consumers. Most payday loan firms will charge $100 for every $500 that they lend, so making monthly payments of $100 to $200 can eat some of the principal and interest charges.

2

Refinance the payday loan using another type of personal loan or advance on a credit card. While this does not break the cycle of debt completely, it does allow a consumer to make more reasonable monthly payments without the extensive charges from a payday loan company.

3

Contact a consumer credit agency and speak with a consumer advocate. These skilled professionals can assist you in getting out of the payday loan trap by negotiating on your behalf with these agencies to either come to a settlement agreement or a better installment repayment plan of the loan than what the company is prepared to offer on its own.

4

Use a payday loan advance company that offers you a promotional 0 percent interest loan for your first transaction to pay off an existing payday loan with another company. This option should only be used if you cannot work out payment arrangements or have no other method readily available to pay down the loan. This will give you a way to pay off the old payday loan, then repay only the amount borrowed with the new company.

5

Pay off the loan completely and resist the temptation to take out a new payday loan. Because of the levels of interest charged with this type of cash advance, consumers can pay thousands of dollars per year in interest fees and charges. Payday loans are expensive and very dangerous for financial health over long periods of time. The sooner you are able to get out from under them, the better off you will be.