How to Get Out of Payday Loan Cycle?

how-to-get-out-of-payday-loan-cyclePersonal loans can bail you out of many a financial problem. However, if you are not careful, the solution may itself become a problem. Take payday loans for instance. It may give you a temporary solution to one of your short-term monetary requirements but if you don’t manage your wealth and debt properly and allow your debt to income ratio to be skewed, you may soon be paying interests which are bigger than the principal itself!

However, not all unsecured personal loans are risky. Structured Installment loans or term loans where you get a period of a few months or a few years to pay off your loan and you are expected to pay small amounts periodically are much safer because the rate of interest is much lower than short-term loans like payday loans and give you enough time to service your loan. The amount that you can borrow at one go, is also much bigger. You also have the privilege of rolling over the loan if you feel you need more time or more money to meet your needs.

Cashco Flex loans

Flex loans offered by Cashco Financial are one of the best installment loans available in Canada. Cashco Financial is an Edmonton, Alberta headquartered company which is present at many locations across Canada and offers various types of loans like Flex term loans, payday loans, auto loans and also legal cash advance. It also offers pawn loans.

If you are looking for payday loans in Edmonton, you can contact Cashco agents who can not only initiate the loan approval process after doing due diligence but also offer you personal wealth management tips and tips on how to use your payday loans safely so that you don’t build up a debt. However, the company also puts Flex loans over payday loans because of its obvious benefits and lower risks.

Ways to escape the payday loan cycle trap

  1. Don’t borrow more: The most important step to fighting payday debt crisis is to stop borrowing more money to pay the debts. You need to make sure that you won’t apply for more payday loans to keep the cycle running. Also, reduce the use of credit cards and debit cards. If you use more cash, you will have less prone to borrow.
  2. Work out a settlement plan: If you feel that you have reached a stage where you can’t pay back the money you have borrowed under any circumstance, inform the lender of your condition. Be transparent and don’t hold back information. They might want to take a relook at the money they expect from you. They will offer you a better paying scheme under which you may have to just settle the principal and they will consider the loan paid in full. They may also give you more time or ask you to pay a much smaller interest. However, even if you have to make a few sacrifices, try to accept the terms of paying once and settling the loan rather than accepting terms under which they allow you to rollover the loan. That won’t reduce your debt.
  3. Take a single long-term loan like Flex Loan that allows you to consolidate your debts: Most payday loans and short-term loans have very high rates of interest and the more you delay in repayment, the quicker the debt mounts. It becomes huge in no time and you may not realize it until it’s too late. That is why a long-term debt consolidation loan might be of help. It would pay off all your debt and reduce paperwork. You will now have to focus on paying off just one loan which has a lower rate of interest.
  4. Consult a free credit counselor: Credit counselors are often available for free in Canada as they work on a pro bono basis. They can help you create a debt management plan and also make you aware of the legal steps available to you.
  5. Cut your expenses: Stop splurging on luxury items. Prioritize your needs. Don’t do anything that makes your debt situation worse than before. Buy what you ‘need’. You can take care of your ‘wants’ after you are free from debt.

Conclusion

Payday loans are like eight-headed hydras and they will continue to suck life blood and money out of you if you don’t act quickly or wait for times to improve. Don’t let it get out of hand if you want to live in peace.

Leave a Reply

Your email address will not be published.