Are you struggling with payday loan debt and you are wondering how you can eliminate the debt and get back on better ground, financially? Payday loan debt is a common problem and it has taken over the nation rather quickly. While these loans are unsecured loans they have higher interest rates because of this. While credit card debt used to be more common, more people are turning to payday loans today and they are soon finding themselves in a financial battle with the payday loan company. If you want to eliminate this debt, you can use some of the suggestions below.
Manage your budget by signing up for Mint
The first step to paying off any type of debt, whether it is payday loan debt or something else, is to start managing your budget. Mint is a financial tracker that can help you do this and there are other free programs available as well if you have an issue with Mint. Essentially, it tracks everything that you spend money on so that you can see exactly how much you spend in a given month. Better yet, it categorizes your expenses into categories like groceries, fast food, etc. It also monitors how much money you make and should be spending in these specific categories based off your income.
Make substantial payments toward your payday loan debt
Remember that with payday loans, time is of importance. The longer it takes you to pay off the loan, the more money you are going to lose. Payday loans have high interest rates and that means you have to pay it off quickly. If you can make room in your budget, start applying as much money as possible toward your debt. Once you have the loan paid off, it will be easier for you to get back on track.
Stay away from taking out additional loans to pay off the original loan
Payday loan companies will often encourage you to take out more loans if you cannot afford to pay off the original loan. While this might sound like a reasonable solution, it can be devastating to your finances. Experts call this the payday loan trap and it’s not something that you want to fall victim to. Instead, just withstand the current loan and do the best you can to pay it off quickly. The interest will accumulate fast, but it’s a much better situation to be in than starting an entirely new loan.