When it comes to getting out of debt, whether related to payday loans or otherwise, you need a plan. Of course, you also then need to put that plan into play. This article will assist you in determining a plan. As you use this information, you’ll want to keep an eye on your budget and make necessary adjustments. You want to be sure you aren’t overspending, as that will lead back to debt. If you don’t have an emergency stash of funds, you may want to put some money into savings, to begin with, so you have an option if something unexpected comes up.
What You Need to Start
Before you begin the process of getting yourself out of debt, you need to know where your finances currently stand. This requires a complete picture of your debt situation. Here are some things you will want to gather up prior to beginning the process:
- Your most recent statements for loans and credit cards.
- Your free annual credit report to check for accuracy and determine all your debts.
- A free credit score from somewhere like Credit Karma or Credit Sesame, where you can also find options for new lines of credit and debt consolidation.
- Your information from the National Student Data System if you have any outstanding student loans to pay off.
Once you have everything pulled up and accessible, it’s time to take a few moments to write everything down. This puts everything in one location so you can easily access it. It also shows you exactly what is happening, so you are sure where you stand and what you’re working with.
This document should have a list of all your debts, including the name of the creditor, the interest rate, the current balance, and your minimum monthly payment. You will also want to determine and write down how much you’ll need to zero out the debt within a certain number of years, perhaps three. This information is often found on credit card statements.
After you’ve done this, make sure to think about any loans or debts you have that may not be listed on your credit reports. This might include loans from your family or friends or amounts due on medical bills. Write it all down, just as you did with the above information.
Lower Interest Rates
High-interest rates can make your amount of debt balloon, which also makes it much harder to pay off. One of the ways to cut your debt down is to look at lowering your interest rates. There are a few different ways to do this.
- Determine whether you might qualify for better interest rates on your current credit cards. This is based on your credit, and while you may not think you will qualify, it’s always better to be sure. Just call up your credit card issuers and ask about lower rates.
- As mentioned above, join a credit monitoring service like Credit Karma. You can see what low rate balance transfer credit cards are available to you. These can cut down the amount that you need to pay, allowing you to leave debt quicker.
- For those who have student loans, consider loan consolidation. You can also research the different income-based repayment plans that are available to you. Sometimes you can bring that payment down quite a bit, leaving you with space in the budget to pay other things off.
- If you have a high-rate auto loan, it’s worth considering options for refinancing. This may or may not be an option for your situation, but it’s always worth finding out what is possible.
- Consider a consolidation option for payday loans that you may owe. Organizations like RealPDLHelp.com can help you bring all your payday loans together into one payment, which will often be cheaper and easier to pay on every month.
Determine Your Actual Budget Numbers
At this point, you will be aware of the total amount that you need to pay off, which allows you to make a real plan regarding how to take care of that debt. There are a few things you should do at this point. The first thing you can do is come up with a total for your payoff amount for all your credit cards and break it into monthly payments. Then you should add monthly payments for all the rest of your debts. This gives you the last number you need, your monthly payment total. This is what you’ll be paying each month to keep above water and start removing debt from your record.
Construct Your Strategy
There are many ways to handle this, and your method may not fit any of the suggestions. However, we’ll offer some options that will work for many people. You can tweak these methods to work with your favorite financial tools and approaches. Take your time when planning a strategy, as you’ll be using it for months or years as you tackle your payday loan debt.
- First things first, determine whether you can afford to pay your monthly payment total until the debt is paid off.
- If you find that you are not able to do so, consider talking to consolidation companies or working with a credit counseling agency. A bankruptcy attorney can also give you good advice.
- If the monthly payment is possible, decide which should be paid off first. This will be the debt you put extra money into until it’s paid off, at which time you’ll choose a new debt to focus on.
- Visit your bank account and set up auto pay for all of your debts, save the one you’re focusing on. Set it up so the minimum payment gets there before the due date, so you don’t run into any late fees.
- Pay whatever amount you have extra to your target debt to pay it off as quickly as you can.
At this point, you simply want to monitor your credit score and make changes as needed. Stick with your plan, and you will watch credit debt fall away for a more positive financial future. However, if you find that things are going awry, it may be time to make changes. If you require more help with payday loans, get in touch with Real PDL Help for additional assistance. Good luck!