Archive for the ‘Loan’ Category

postheadericon What to do if you can’t pay back your payday loan

You quit your part-time job but still need to pay the rent. Your car breaks down suddenly and you need a little extra help. Sometimes, you need a little cash to get by. So you get a Payday Plus $300 loan and make good on your bills. But what happens when you can’t repay a payday loan? Here’s what to do if cannot pay back your payday loan on time:

1. Check your liabilities

Go over all your liabilities, from your payday loan to overdue bills. Focus on the ones that have the highest interest rates. With high rates, the longer you take to clear the debt, the more money you’ll end up paying.

2. Extend your repayment plan

Ask your lender for an extended payment plan. You have to ask for an extension before the last day your loan is due, though. You’ll also sign an amendment to your loan agreement. Read it over and make sure you understand the new terms and interest rates you’re agreeing to. You might be able to get a few extra weeks to repay your loan.

3. Consider a personal loan

Don’t be afraid of big banks, at least not when it comes to personal loans.

Taking out a personal loan can help you pay off your debt. These loans have much lower interest rates and longer repayment terms than payday loans. If you have poor credit, you’ll be happy to learn that you can even find personal loans for credit scores under 550.

4. Try a credit union

Credit unions and payday loan lenders have a lot in common. You usually can find one near you offering small installment loans that can help you make important payments.

While you have to be a credit union member for at least a month, you can get anywhere from $200 to $1,000 with terms from one to six months. The interest rate on a PAL is much less than the interest rate on a payday loan, up to 28%.

5. Get help

When you’re in a tough situation, it’s always a good idea to get help, whether it’s credit counseling or a cosigner for a loan. Asking for assistance is a big step in getting on the right track.

Conclusion

You might consider a payday loan, but you don’t need it. When you can’t repay a payday loan, there are plenty of alternatives for you to consider. If you’ve already gotten one, take caution and know your rights. Explore ways to pay it back as soon as possible so you’re not trapped in debt.