Once a payday loan is taken, most consumers get into a cycle of paying one off and getting another. In some cases, another payday loan is taken to pay a different one off.
This is a vicious cycle that costs consumers a lot of money in administrative fees and interest. It is best to get out from under these loans as quickly as possible to reset your finances. In Canada, financial emergencies happen and the easiest way for those with less than perfect credit to secure the funds needed is through payday loans.
Repay the Loan on Time
Repaying a payday loan on time is absolutely important. If you fail to make the payment, the lender will deposit the check left with them into your bank account. If the check is declined or comes back as nonsufficient funds, collections actions begin and eventually, you’ll be summoned to appear in court. The consequences of not paying back a payday loan are far more extreme than paying the high interest you agreed to pay when taking the loan.
Do Not Obtain another Payday Loan
Once you pay a payday loan in full, refrain from getting another. This is how that vicious cycle begins. So you might be a little broke financially for a week or two, you’ll find a way to make ends meet. Payday loans are designed to help those in need of funds with a stable job to get the emergency funds needed. They are not intended to be used like a revolving door obtaining one to pay another and so forth.
Consider Selling Unneeded Items to Replace the Funds
When you know that the payday loan is going to strap you slightly after paying it back, organize a yard sale or take items of value to a pawn shop to sell. There are several ways to get around being left short after repaying a quick cash loan. It takes a lot of will power to not go and get another loan. Simply find items around the home that never get used and advertise a yard sale. Offering items for sale in an online Canadian classified situation is another option. It will help to offset the funds lost paying back a payday loan.
Payday loans are great when you’re in a pinch but paying them back causes more financial strain. Those that seek the financial assistance of payday loans are generally unable to obtain a traditional personal loan. Some consumers feel trapped by these types of loans and find it impossible to get out from under them. It takes a lot of strength on your part to stick out having a little less money for a week or so.