If You Owe a Payday Loan, Can You Get Another

The chances of getting a second payday loan before paying off the first one is very low. Lenders can see that you already have a loan and will not approve you for another. There are some payday lenders that will extend a second loan, but you don’t have to dig too deep to realize why getting a second loan could be seriously detrimental to your finances and overall well-being, and no, we are not being too dramatic here. Let’s take a look.

A payday loan, sometimes called a check advance loan or cash advance loan, seems like a harmless and easy fix. You are a little short on cash and have some important bills to pay. A payday lender can get you cash quickly, usually $500 or less, without much hassle or a credit check. While the extremely high interest rate of upwards of 400% should alarm you (in 2017, the average personal loan interest rate was between 10% and 28%), you are committed to paying it back by your next paycheck. But what happens if two weeks roll around, and you don’t have the funds to do it.

Example: Take out a loan of $500 with a two-week term and an interest rate of 400%. If you don’t pay it back by the two-week deadline, you will now owe the original $500 plus interest, and the cycle continues if you continuously do not pay back the loan.

Lenders will generally not give you another loan to pay off the first one, but they might extend the terms of the first loan or increase the amount if you call them and explain your situation. The problem is that issuing a second loan is not necessarily an act of kindness. You will now will undoubtedly, plunge yourself further into a debt spiral you may not get out of.

Taking our example above, if you requested a loan extension on your loan due date, you’ll owe your original amount plus interest. To extend that loan, your lender will likely charge you a fee of $25-$45. In addition to that amount, it is likely that you gave your lender permission to pull the original loan amount from your checking account, which will likely put your account in a negative balance. Any checks or bills paid from that account that bounce, will occur a Non-Sufficient Funds (NSF), which average at $35 for each check that bounces. If in our example, if you bounced four checks, you would need to add another $140 to your debt.

While creating a budget and figuring out where you can cut costs are you two main goals, if you are considering extending your original pay day loan, one can assume that you are in a precarious situation and need money quickly. Rather than trying for another loan, consider other options:

• Offer to run errands or perform odd jobs for family, friends and neighbors.
• eBay: Sell anything from books to clothes to toys to car parts to car parts online.
• CraigsList: Much like eBay, you can sell anything, but folks will pick it up locally.
• Sell items at a pawn shop.
• Have a garage sale.
• Field Agent: An app that you download to your phone that pays you to complete jobs like checking prices and scanning bar codes in stores.
• TaskRabbit: This site connects you with local people willing to pay you for a wide variety of tasks — from light carpentry to picking up takeout food.

• Thumbtack: Similar to TaskRabbit, this site is also for people looking for help with odd jobs or professional skills in home improvement, education or wellness.
• UserTesting.com: They will pay you $10 via PayPal for every 20-minute video you complete by looking at websites or apps, completing a set of tasks, and speaking your thoughts aloud.
• Uber, Uber Eats or Lyft:  If you’ve got a car, put it to use with this service that’s an alternative to taxis and food delivery.

Ultimately, the best thing to do if you find yourself buried under debt is to contact a loan consolidation company like Real PDL Help and work with experts who have decades of experience helping everyday people with their finances. Even if your initial loan was small, you can see how it can quickly swell into an amount far beyond your means. The counselors at Real PDL Help will work with both your lender and you without judgement to help you pay back your original loan and set yourself up for future success.

A loan consolidation company will:

• Guide you through the process of getting payday lenders out of your bank accounts.
• Help you establish a budget, based on your income, that will enable you to settle all your payday loans.
• Consolidate your loans and reduce your debt so that you aren’t piling on fees and debits.
• Resolve your payday loans once so you can move on with your life.