Some people reckon that payday loans are like a cartwheel trap. Once you get on it, you continue churning cash for the lender while you can never get out. It is not difficult to understand why. People who are desperate enough to take up these types of loans are already facing very tight financial situations. It is not a surprise to think that many of them will not be making prompt full payments and will instead accumulate bigger debts by just making minimum payments. And looking at how high interest rates can be, many borrowers end up paying many times the principle amount by the time (if ever) they fully redeem it.
Unless you truly feel that paying through your nose is the one thing you want to do for the rest of your life, you might already be feeling the strain a payday loan is making on your ego. The loan quantum is not big, but the interest you are being charged is almost like an insult. So if you are really desperate to put this firmly behind you, here are some ideas that can make a lot of sense in trying.
Approach banks and unions
Public service organizations and banks can have very negative views on payday loan lenders. Because even though these lenders are legally lending money to willing borrowers, the interest they charge and fees they command show everyone around that they are out to make money. Not that being profit-centric is a crime. But there is a public feeling that lenders offering such loans should be focused helping people get out of their financial problems instead of pulling them into a deeper on by exploiting the desperation.
For a bank, taking business away from payday loan licensed money lenders is also a way to weed out the competition. When you contact a credit union or bank about your problem, you might be surprised that many of them are more than willing to help you. If you reach them at the right place at the right time, you might be offed a one-time short term loan to clear your payday debt.
Borrow from people
It can be a hard thing to do to borrow money from family and friends. But the odds are that they would be more than willing to lend you that money if they realize that the use of the funds is to fully redeem a payday loan. To them, it would feel like being the hero in a sci-fi movie.
The weird drawback of borrowing from people we know is that many people put less emphasis on returning the money. For some reasons, borrowers can sometimes feel that their family and friends would understand and then fail to promptly repay the debt. Instead they rather spend extra cash on rewarding themselves. You want to be careful when you borrow from people you know. Don’t take their assistance for granted.
Sell your stuff
With eBay, it is so easy for the average person to dispose of his belongings while collecting back a fee. Start putting up things you do not need anymore for sale. You never know. That old toy you have stuffed in the basement could be worth thousands of dollars to a collector. Surely there are some stuff you have that are worth some money. It’s just a matter of whether you are ready to part with them.
Return items to retailers
Many retailers offer money back guarantees with no questions asked. If you have any big ticket items that are still within that guarantee period, return them and get your money back. Desperate times calls for desperate measures. You can always buy the item again when you are debt free and in better financial health. The strange fact is that you could probably use the savings you made on the payday loan from redeeming it to buy the item you returned. Kind of a weird science isn’t it.
Use your credit card
The thought of using debt to repay debt can appear radical. But this concept does make perfect sense when you are using cheap debt to repay expensive ones. Even though the interest charges on credit cards are not exactly cheap, they can look like peanuts when compared to the rates on payday loans. So no one will blame you if you choose to do this.