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How To Stop Paying Payday Loans

How To Stop Paying Payday Loans

Taking out your first payday loan can be the beginning of the never-ending cycle of constant loans over a period of months and years. What is normally meant to be a short-term loan for two weeks or less can often snowball and require additional loans to pay off previous loans. Payday loans are legally binding and all terms are spelled out in the provided contract so the only way to stop paying payday loans is to pay them in full. Treat a payday loan like any other excessive debt and use common money management techniques to eliminate that debt.

Gather all of your financial documentation together and determine what your total incoming and outgoing costs are so you can develop a simple budget. Without knowing where your money is going, it is impossible to organize your finances and tackle high-priority items like paying off payday loan debt. Normally, a budget will prioritize housing, food and utilities as the top priorities with items like a payday loan coming next on the list.

Now that you know how much money you have and where it is going, you can more accurately budget and pay for items which need your attention first. If you find that you don't have enough money to start paying off your payday loan there are a couple of steps you can take to generate more income. Consider having multiple garage sales and selling any additional items you have in storage or taking up space in your residence. Most consumers have a significant number of personal possessions they no longer want or use and can easily turn into additional income. Also consider getting a second job to temporarily save enough money which can be used to pay off your payday loan. As a final option, consider cutting back on wasteful spending such as morning lattes and eating out at lunch five days a week.

Now that you have a budget an additional income, you will be able to stop paying payday loans as soon as they're paid off. If you have multiple payday loans, focus on the smallest loan first and then progressively work towards paying off the larger payday loans. This process may take several weeks or months and may require a few more additional payday loans until the total balance is under control and begins going down. It is important to stay focused since the few months needed to work a part-time job, cut spending and sell positions is a small price to pay for years of stress-free living.

Once you have paid off your final payday loan, take steps to ensure you are never dependent on these loans in the future. It is highly recommended to build an emergency cash fund of between three and six months living expenses. While an emergency funds primary purpose is to provide a cash cushion during times of unemployment, it can also be used to pay for one-time emergencies like unexpected automobile repairs. If you have a few thousand dollars in the bank dedicated solely to emergency purposes then you will almost certainly will never need the services of a payday loan company ever again.

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