Payday loan, also known as paycheck loan or pay advance loan, is issued to anyone who is in need of immediate cash. This article gives an insight into how to get out of payday loans.
There are times when you are in dire need of extra cash to meet an unexpected expense or an emergency. If you are badly in need of cash to solve your immediate financial problems, approach a financial institution that grant payday loans. Payday loans provide cash up-front to tide over your short-term financial needs such as settling your medical bill or to repair your car. The minimum amount of payday loan is $100 and the maximum amount is $1000. Here are some of the reasons why people prefer payday loans:
- It is easy to apply for payday loans; you can ap
ply for a payday loan/advance over the phone or online by filling an application form. - A financial institution that grants payday loan will not check your credit rating or credit history.
- You do not have to provide documents such as a bank statement or your latest salary slip.
- Once the payday loan is approved, the cash would be deposited in your account within an hour or two.
- You can apply for your payday loan from the privacy of your home or office.
To avail payday loans, you do not have to submit documents such as salary slip and other details that are usually required for standard loans. As they are easily available, many of the middle-income families are trapped in payday loan debts. The rate of interest on payday loans is always high and often, people take a payday loan to repay another payday loan. This leads to a vicious cycle of borrowing and it can become difficult to get out of payday loans. You can put an end to this kind of borrowing by considering other alternatives before availing a payday loan. Here we look into how to get out of payday loan debts.
You can start by breaking the cycle of borrowing money to clear off another debt. If you have several payday loans looming over your head, stop applying for a new one. Meet a financial advisor or debt counselor to help you out of the payday loan debt.
When you need to borrow money, consider approaching your local Credit Union or a reputed financial institution for credit. Ensure to check out the rates of interest offered by the various offline and online financial institutions before applying for a loan. Approach a financial institution or bank that is willing to issue you a loan with a low rate of annual interest. Use this amount to clear off all your payday loans. Debt consolidationis also an option to clear off payday loans.
If you are neck-deep in payday loans debt, you need to make substantial changes to your lifestyle. Instead of having food in a fast-food joint or restaurant, cook food at home. Make a monthly budget plan; this will give you an idea about your spending habits. If you want to get out of payday loans buy only what is really essential and avoid all the luxury purchases until you have cleared off all your debts.
If you are badly in debt, do not hesitate to approach your local Credit Union for a low-cost credit counseling program.
In short, if you want to come out of payday loan debt, be organized and maintain an account book to write down your daily expenses and to understand where you need to budget. Keep aside a small amount of money as savings every month. You can use the savings as an emergency fund instead of applying for payday loans.
By Maya Pillai
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