Tips On How To Cope With Payday Loan Debt

3D render of mannequin lifing the word DEBT.

Payday loans are usually meant to effectively deal with unforeseen expenditure. But it is sad to note that in most cases, many individuals take these loans to foot their essential needs expenses.

This can include buying food, paying rent and utility bills and typically meeting any other living costs. On the other hand, some people take payday loans in an attempt to service some other debt they may have incurred.

All this generally leads to a vicious cycle of taking more loans that in the long run can make most individuals to sink deeper and deeper into debt. To this end, the following are some helpful tips on how to cope with payday loan debt in a hassle-free manner.

Break the borrowing cycle

The main trap quite a large number people fall into when it comes to payday loans is taking those they can hardly afford. This in most scenarios usually prompts them to take more and more payday loans.

If you happen to fall under this category, it is high time you do something to stop this detrimental cycle, and only apply for payday loans when you absolutely have to. More to the point only take loans that you can be able to clear without problems.

Stop CPA payments

In essence a payday loan normally falls under the category of non-priority debt. This therefore means that it should only be cleared with the spare money after you have meet all your priority expenditure. This once again includes food, rent household bills and other critical living expenses.

When you made the application for the payday loan you were obliged to furnish the lender with your credit card information. Which was done in order that the lender can put in place what is known as the continuous payment authority. This is typically what they will use to directly deduct from your bank account what is due to them on the deadline you agreed to.

However, this is by no means a legal requirement , and by taking the necessary time to alert your bank , you can easily stop these automatic deductions on your income. That is until it becomes convenient for you to clear the payday loan debt.

Only repay what you can comfortably afford

One important thing you need to understand is you cannot in any way be obliged to clear a debt that you can’t possible afford. Take time to determine just how much you owe to the lender including rollovers, and make the necessary calculations on how long it will take to meet the debt. At the same time, make sure that you only pay exactly what you can afford.

Start a new chapter in your life without payday loans

Once you have managed to break the vicious cycle of borrowing, you will have full control over your finances. You can now begin a life where you are no longer required to take payday loans. You can also take debt management counseling to assist you to better manage your income and expenditure. Hope these tips on how to cope with payday loan debt have been insightful.

Reference

http://moneyaware.co.uk/2013/07/how-do-i-get-out-of-payday-loans/