A payday loan, or paycheck advance, is a convenient and fast way of getting cash for an emergency situation. You can take out multiple loans simultaneously; however, this can become unmanageable and very high interest fees can accumulate. The interest rates can sometimes become higher than the actual loan itself. Luckily, it is easy to consolidate your payday loans into one monthly payment so you don't accrue too much interest and go into debt.
Step 1
Use a credit card with a credit limit that is high enough to pay off all of your payday loans. This way you will only have one monthly payment to worry about and pay less interest fees.
Step 2
Contact your bank and apply for a personal loan. You can easily get a loan if your credit is excellent. If you have less than stellar credit, the bank will require some sort of collateral such as real estate property or an automobile. Getting a bank loan will save you from paying high payday loan interest fees.
Step 3
Take out a loan from an online private lending institution such as Prosper.com. This website has private lenders who lend money to private borrowers in an eBay-style auction. The interest rates for these types of loans are very low and won't change.
Step 4
Contact friends and family members and ask for a personal loan. Tell them you will repay them over several pay periods with interest. Paying interest rates to friends and relatives is better than continuing to pay the high interest fees of payday loan centers.
References
- "Deal with Your Debt: The Right Way to Manage Your Bills and Pay Off What You Owe;" Liz Pulliam Weston; 2005
- "How to Fix Being Broke: Get out of debt, Stay out of debt and Save a lot more money;" Leah Childers; 2008
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