Regardless of how you ended up with multiple payday loans to your name, you’ve made a good decision by committing to coming up with a plan to get yourself out of debt. Each year, millions of people take out payday loans for a wide range of reasons. Whether it is a family emergency or simply a desire to make the holidays extra special for those you love, the temptation to take out a payday loan can be strong.
Unfortunately, despite the best intentions of the borrower, life has a way of throwing unexpected curveballs and often making the repayment process more difficult than initially anticipated.
Whatever the case may be, here is a guide on how to pay off multiple payday loans and regain your peace of mind:
1. Stay calm and composed
As mentioned above, if you’ve found yourself in a tricky situation regarding payday loans – you’re definitely not alone. It is important, now that you’ve decided to do something about it, that you don’t give in to the stress and anxiety.
In order to successfully make a plan and pay back your loans, you’re going to need a clear hear and a positive attitude. Have faith in the fact that every step you take in the right direction will boost your positivity and get you closer to your goal.
2. Get an overview of your financial situation
Clarity is the best approach on how to pay off multiple payday loans. It’s important to get an overview of your financial situation. Your payday loans are just one element of the complicated picture that ultimately constitutes your financial reality. The number one factor you need to pin down is the balance between your income and expenses.
Once you make the commitment to get out of debt, you’ll want to find all the small ways you can limit your expenses, or outflows. Whereas income tends to be less flexible overall, you’ll probably find that your expenses are a good deal more elastic when you really break things down into wants and needs.
3. Re-evaluate your essential expenses
Speaking of wants and needs, you’re likely going to have to reassign a few items from the first list if you’re going to be able to really make a dent in your debt. Keep in mind that eliminating certain non-essential expenses (dining out, entertainment subscriptions, luxury skincare products, etc.) doesn’t have to be a permanent change.
It is just something you need to do a for a fixed amount of time until you get back on track. The aim of this process is to identify non-essential expenses you could forgo for a set amount of time in order to free up capital to make payments on your debt.
4. Develop a repayment plan
Once you’ve got an idea of the resources you’re working with, it is time to sit down and make a plan for how you’ll pay back the debt. Remember that you can save a lot of money by paying back your loans strategically, so be sure to invest the time needed to fully understand the various conditions of each one.
Determine which has the highest annual percentage rate and what your monthly payments are. Craft your plan around paying back the loans with the highest interest rate first.
5. Look into refinancing and consolidation
There are options available that can help you get your debt to a more manageable level. Debt consolidation is essentially the process by which you use new debt to pay off existing debt, with the goal of securing more favorable terms. Although this might sound counterproductive, and in some cases is, there are instances when refinancing makes sense.
It is necessary to carefully weigh your options and ensure that you’ll actually be able to lock in a lower interest rate before you agree to anything.
