How to Structure Payday Loans As Low Interest Loans

Payday loans are extraordinarily high-interest, short term loans that are issued by non-bank lenders. If you have no means to repay the loans in cash, restructuring them with a lower interest loan can be a wise decision that may save you a great deal of money and reduce your stress. Credit cards, unsecured personal loans and secured personal loans are all excellent methods for restructuring high-interest payday debt.

Instructions

1

Repay as much of the payday loans as possible using a credit card, even if it may mean that you'll be one to two months late making the minimum payments. If you have a card that still has a low introductory rate, you'll save even more money by shifting the debt to it. Credit card lenders usually are much less aggressive than payday lenders in pursuing collections. Payday lenders often start out by immediately withdrawing funds from your bank account. If the lender doesn't accept credit card payments, get a cash advance on the credit card and use that to repay the loan.

2

Apply for a secured loan to repay your payday loans. A secured loan is a personal loan that uses some significant asset as collateral. Home equity, a vehicle, valuable artwork or jewelry can be used to secure a personal loan. These have lower interest rates than ordinary personal loans and are easier to get approved as long as you have some significant asset to offer.

3

Apply for unsecured personal loans from banks and other lenders. These loans require a reasonably good credit rating to be approved, but they have much lower interest rates than those charged by payday lenders. In addition, they usually are issued for periods longer than five years, giving you plenty of time to repay them.

4

Go to a pawn shop and ask for a secured loan if all other attempts have failed. Pawn shops will accept jewelry, electronics, artwork and just about anything else with a resale value as collateral for a loan. These loans will have higher interest rates than those offered by banks, but lower ones than payday lenders. This may enable you to get a reprieve from payday lending collectors while you get your finances back in order.