End Payday Loan Debt

We just came across this really cool video about how to end payday loan debt. Yes, it’s a promo video for a consolidation plan, but it’s also a good insight into some of the options out there.

It’s also nice to see a PDL video which isn’t promoting the loans themselves, but rather, a means for getting help, which is why we decided to share it with you all here.

If you have any questions about the video or payday loan hell, let us know in the comments below!

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Pay Day Loan Help

When you are desperate for money, a payday loan can seem like the best thing that can ever happen to you. They are very easy to approve, there offices are on every other corner and the staff is not concerned about asking a dozen of nosy questions.

There is a catch though! Pay day loans can haunt you for eternity. The emergency that made you take a pay day loan might even be over, but to keep your accounts balanced, you find yourself renewing your loan. With the high interests of pay day loans, you can fall into further debt hence it’s only logical that you end the renewal cycle and run away from the grasp of the lender. Below are tips on how to get out of payday loan hell.

  1. Note down when the payment is due

Of course, the simplest way of stopping the pay day horror is simply paying back the loan. By default, you are supposed to pay your loan on your next pay day. Postponing the payment can be suicidal hence it is wise to pay the loan as fast as possible.

  1. Determine how much you owe, and how much you will be required to pay over time

In your spreadsheet, make a table indicating the loan principal amount, the interest fees, and the total amount of money you are supposed to pay at the end of every loan period. In the event that you don’t pay your loan back, it might cost you an interest of 400 percent or higher if the loan was to be repaid in full. Look at this step as a motivation, but not as a way of scaring the hell out of you.

  1. Make a payment plan

In most cases, your lenders have a way of setting up a payment plan if they have re-loaned you a number of times. Be sure to enquire the requirement of this option and then go ahead to do all that it takes to set up a payment plan. Additionally, it would be helpful if you calculate how long the plan will take and how much money it will cost you over that period.

  1. Make a budget

When it comes to financial management, the importance of a budget cannot be overstated. Of great significance, making a budget is not hard. On a blank piece of paper, list down your monthly income in one column. Besides the monthly income, make another column listing down your monthly expenses. To make your budget explicit, you can look at the bills of the previous month. Next, look at any possibilities to cut back on your budget. Apply the difference you get to your pay day loan.

  1. Talk to a financial advisor

In the event that you are having a hard time managing your funds, finding professional advice is one of the greatest ways to avoid the predicaments of taking a pay day loan in the future. There are innumerable counseling agencies that will charge you a very small amount of money, some will charge you nothing at all. Search on the internet for any financial of credit advisor in your locality.

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Are loan consolidation companies worthwhile?

For someone struggling with many loans to pay off, consolidating the various smaller loans into one large loan, seems, on the surface, to be a great idea. After all, not only will the debt now be much more manageable and simple, as one can now concentrate on one, larger loan, versus being burdened by many smaller loans, loan consolidation will usually greatly reduce the interest rate, meaning that those monthly interest payments will greatly decrease, by only having to pay interest to the loan consolidation company, which is usually much lower than all the smaller interest charges combined.

Optimized-home equity

However,one must ask oneself if he or she is not going from the frying pan into the fire. The loan consolidation companies obviously are making money somehow. And that is because, although the monthly interest payments will be reduced, the loan will be greatly extended over a much longer period of time, in such a way that in the long run, the borrower will end up paying more interest than he or she would have without consolidating the loan.

There are many other pitfalls that may arise when consolidating a loan. If the loan consolidation company requires a borrower to secure the loan through a home equity, the borrower will now be going from an unsecured debt, to a secured one, meaning that if he or she doesn’t manage to pay up, he may lose his house.

In any case, taking out a loan consolidation does not do anything to solve to core problem: That the borrower is in debt, either because he is spending more than he should, or because he or she is not earning sufficiently.Taking out a loan consolidation will do nothing to help in the long run if the borrower does not take immediate steps to insure that both the debt will be paid off in a timely manner, and that it will not happen again either, by honestly calculating all of one’s earnings, expenses, and appropriate spending. Having less interest to pay monthly will certainly do nothing to help if the borrower will continue to spend too much and continue to go down in debt.

So, are loan consolidation companies worthwhile? Well, it depends. If you find an honest and trusted loan consolidation company which is not looking to rip you off because they know that you are in a sensitive and desperate situation, then loan consolidation companies may be worth it.

However, this will only work if the one in debt starts to take immediate steps to insure he or she is on an appropriate spending plan.That way, the borrower will gain in the short run, by having greatly reduced monthly payments and by having less worries on his or her back, but he or she will also gain in the long run, by taking definite actions to ensure his or her debt-free future.

But if the one in debt continues to recklessly spend more than he or she is able to, not only will the problem not be solved, as the total debt will not go away, but in the long run, more interest will be paid out of his or her pocket.

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