Sometimes you may find yourself in a situation that needs urgent cash. For instance, your car may suddenly breakdown, your roof may start leaking, or you or your loved one can get an unexpected illness which needs medical attention. If one of these things happens to you, and you don’t have enough funds in your savings account, then you may need to turn to a payday loan to cover these necessary expenses. Payday loans are fast loans convenient to people who need urgent cash to take care of financial emergencies. However, while these loans can be quite helpful, they can lead to a financial nightmare if you don’t manage them properly.
Most payday loans come with extremely high-interest rates and terms that can make it difficult for some borrowers to repay them. In addition, some lenders charge a “rolling over” fee that can trap you into an endless cycle of debt.
How to Get Out Of a Payday Loan Legally
If you are struggling to pay off your payday loan and looking for a way to get rid of the debt, then there’s hope for you. In this article, we have shared a few ideas on how you can eliminate your payday loan and get back on your feet.
- Find ways to Generate More Cash
Most people take out payday loans because they are short on cash. The problem is when it’s time to repay your loan, you will also be short on cash with a lot of bills to pay. Therefore, in order to make it easy for you to repay your loan, you’ll need to cut on expenses or earn more income. Both of these options aren’t easy, but they are effective in getting you out of your loan debt. While reducing your spending can help you save more, it won’t be enough to help you get rid of your payday loan. So, the better option is to hustle more to increase your take-home pay.
Some of the easiest ways to generate more cash include selling the stuff you don’t use, doing more overtime shifts, or finding a side hustle. All these will help you make more money to help you pay off your loan.
- Consider Extended Payment Plans ( EPP)
Did you know that you can actually negotiate with your lender for an extended payment plan? EPP allows you to repay the loan in smaller monthly instalment payments for an extended period of time without an increase in interest or additional fees. Before contacting your lender to make this arrangement, take a closer look at your budget and determine the maximum amount you can afford to pay toward your payday loan every month.
The good thing about extended payment plans is that you won’t be handed over to debt collectors so long as you stay on top of your repayments. Ensure that you read the terms and conditions before signing the new loan agreement for your EPP. This way, you’ll avoid any bad surprises in the future.
Remember that some payday lenders won’t agree to an EPP, so it’s always good to ask about it before taking out the loan. If the lender doesn’t offer EPPs, consider finding one that does just in case you find yourself unable to repay the loan.
- Refinance with a Better Personal Loan
Another way to get rid of your loan debt is by securing a personal loan. Typically, personal loans have lower rates, better terms, and longer payback periods compared to payday loans. By refinancing your payday loan with a personal loan with favourable terms, you can reduce your burden and probably get back to your feet.
However, remember that you’ll need to have a fair credit score in order to qualify for a refinance. If you can’t find a good lender for a refinance, you can try out nowloan.co.uk, which is one of the best loan comparison websites in the UK. Here, you’ll find a personal loan that suits your needs and budget.