A payday loan cycle can be endless if you don’t stop it now. This type of loan will help you pay an emergency expense. For example, if your car broke down and you don’t have an emergency fund, you could take out a payday loan.
The loan charges a significant fee, say $50. So, if you took a loan of $200, the total amount you owe from your lender is $250. When your paycheck came and it’s not enough, you asked your lender to extend your loan by paying only the fee. Then, you keep on extending and paying the fees only.
Fast forward a year after, you have paid the fees, but you still owe your lender $200. This is legal but you’re not alone in this payday loan cycle. In fact, 80 percent of people in the US can’t pay off their loan within the 14-day term. As a result, they get trapped in the cycle.
In order to stop the cycle, the first thing that you must do is to borrow less every time you borrow money. You can’t just break free from the cycle immediately. It’s impossible. But you can borrow less every time you return.
The next thing that you can do is to use the community resources. They’re meant for people who are in this type of situation. Unfortunately, some people have negative perceptions of these resources. However, a lot of people have already used them as a helping hand to support their financial spot.
Another step you can take is to talk to a debt settlement expert. This option is rarely recommended as a possible solution for those who are in great debts. It’s probably because of a number of scams being reported. For those who have understood the importance of it, they found it to be extremely beneficial to their financial situation.
When you talk to a debt settlement expert to help you with your payday loan cycle, you can avoid bankruptcy. You’ll be able to manage your dire financial situation and get back on your feet again.
Although filing bankruptcy is considered by many as an ideal way to settle their debts, the consequences will follow you for the rest of your life. And if you’re found guilty of fraud for not telling the truth that you filed for bankruptcy, you could lose your job.
By talking to a debt settlement expert to help you settle your debts with your lenders, you can avoid bankruptcy and its consequences.
If you need help now, call a debt settlement expert before it’ll be too late.