You may be in desperate need of quick cash in order to meet some of your short-term financial obligations. In this case, you can opt for a payday loan to meet your purpose. However, you must be very careful with the way you obtain this high interest revolving credit since you are borrowing against your monthly paycheck.
Though you should stay away from these loans to the best of your ability, yet if you are forced to opt for one of them, then you should abide by certain guidelines in order to prevent ruining your financial health as well as credit worthiness.
Essential points to consider while applying for payday loans
Here are some of the crucial points that you must keep in mind while applying for payday loans:
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>Never fall back in making the repayments – Repaying the payday loan within the set deadline should be on top of your priority list. If you fail to repay the loans on time, then you’ll have to bear extra charges levied on them by the lenders, in addition to the high rate of interests that you’ve already agreed to pay.
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Always compare the offers of different lenders – You should opt for an experience and legitimate payday lender. Moreover, find out whether or not your payday lender is licensed to originate such loans in your state of residence. So, it’ll be best for you to survey the local payday loan market and get multiple quotes in order to locate the most suitable payday lender.
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Don’t take out payday loans when unemployed – Apart from the above tips, you should never take out payday loans when you are unemployed. This will jeopardize your financial health beyond repair and that you may ultimately have to file for bankruptcy in order to get rid of those unforgiving payday lenders.
How to pay off payday loans
If you need help with payday loans, then you can opt for the following debt repayment options:
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Cash-out refinance – One of the most effective ways to repay outstanding as well as delinquent payday loans is to take out a secured mortgage known as cash-out refinance loan in order to pay them off and close all the payday credit accounts. In this type of payday loan help, what you’ll be doing is consolidate multiple payday loans into one single and much affordable loan. This consolidated loan will be comparatively larger in value but you’ll have lower rate of interest to pay as compared to the payday loans. Moreover, you’ll have to make a single payment every month and so, you won’t have to juggle with multiple monthly payments anymore.
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Debt settlement – Another way to resolve your payday crisis is to settle your debts with the lenders. In this type of debt repayment strategy, you’ll have to negotiate with your lenders for a reduced debt repayment amount. Here, you may either work with a debt attorney to help you with the negotiation or enroll yourself in a debt settlement program. In any case, you’ll have to make a single lump sum payment to the lenders. This is one of the most suitable bankruptcy alternative for people who have a steady income but unable to keep up with monthly financial obligations.
Finally, you have the choice to file bankruptcy, if all the other debt relief strategies like payday loan consolidation, credit counseling or debt management programs have failed to bail you out of your financial crisis. However, even in this case you must consult and work with a bankruptcy attorney so that you are successfully discharged from your debts.
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