How to Get Out of a Payday Loan Mess
- 1). Examine your budget. The first step to getting out of debt is to change your spending habits. If you do not have a budget, make one. Reducing expenses will free up money to pay off the loans. Giving up your morning cappuccino at Starbucks, for example, will help you pay off those loans more quickly.
- 2). Ask for a payment arrangement. The lender may allow you to pay only the interest on the loan and extend the loan for another two weeks, or put a freeze on the account and establish a payment plan with you.
- 3). Begin a step-down program. If you are paying off one loan by borrowing another every payday, stepping down gradually may be the solution. Pay off the current loan and take out a smaller loan to cover only needed expenses. If you have been borrowing $300 every payday, for example, step it down to $200. Each payday make the loan smaller until it is paid in full.
- 4). Find a second source of income. Sometimes getting a second job, even temporarily, can help your financial situation. Sell what you no longer need at a yard sale or consignment store for extra cash.
- 5). Get help. Contact a credit counselor to help you improve your financial situation. Debt and revolving credit are addictive. If you find that you just cannot stop borrowing money, seek the advice of a financial counselor.
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