The topic of payday loans is complicated. Generally speaking, these are loans that consumers get from banks in installments over a short period of time, sometimes even as short as a week. The loans are short-term and have high-interest rates compared to traditional loans (depending on the lender, for example, Conway Green Loans, the average cost is about 400% APR). To make it worse, there has been an increase in recent scams as conventional lenders have gotten stricter on bad debts. However, there are many ways to handle payday loans, even if you have several at a time. In this article, you will learn about such methods.
Ways to Pay Off Multiple Payday Loans
If you are struggling to pay off multiple payday loans, there are several steps you can take to get rid of the debt quickly. Below are three tips to help clear your payday loan debt.
Consolidate your debt into one loan
This will likely require finding a lender who offers consolidating loans, but it can save you money in the long term. By combining multiple small loans into one larger loan, you will be able to reduce the amount you have to pay back each month.
Apply for forbearance or deferrals
If you can’t afford to pay all of your debts right away, ask your lender if they offer payment plans that allow you to delay payments. Forbearance allows you to stop making payments on your debt and still stay within your repayment schedule, while deferral delays payments for a set period of time and offers more flexibility when it comes to future payback dates.
Consider seeking financial assistance from family or friends
While it may not be ideal to ask for financial help from those who are closest to you, sometimes unforeseen circumstances arise that make it difficult to manage finances on your own. If friends or family members are willing and able to pitch in a little bit, you may find the helping hand you need to pay those payday loans off.
What Happens if You Default on Multiple Payday Loans?
If you default on multiple payday loans, the lenders can take various actions including turning your loan over to a collection agency and/or filing for bankruptcy. Keep in mind that not all lenders will take such drastic measures. However, if you’re struggling to repay your payday loans and find it hard to keep up with debt payments, it may be a good idea to talk to the lender about a possible work-out plan.
Like many people you may find yourself in a situation where you are struggling to pay off your payday loans in a timely manner. The interest on these loans can add up fast, and it can be hard to come up with the money needed to repay them all at once. Now you know that there are ways that you can pay off your payday loans quickly and easily.