Getting a payday loan can be a life-saver. It can help you out of financial jams, such as paying for an unexpected bill or covering emergency expenses.
In fact, millions of Americans use payday loans each year. These mini-loans are easy to get if you have proof of employment and a bank account.
In most cases, you have until your next payday to repay the loan and the fee. However, some offer longer terms that can last a month or so.
If you recently took out a payday advance, you need to pay it back as soon as you can. And with the following guide, we can help you do just that.
Let’s review 10 ways you can repay your payday advance quickly.
1. Set Up Automatic Repayment
It’s easy to forget bill dates, but, with automatic payments, you won’t have to remember. In fact, many payday advance companies require applicants to have a bank account for this purpose.
You can set it up so that your loan is repaid the same day your direct deposit hits your account. This way, you don’t forget about the loan.
Late fees will accumulate if you miss your scheduled repayment.
It’s better to repay your loan than take out another if you need more money to cover your monthly expenses. Just be careful not to end up in the payday advance loop, where you have to continuously borrow money to make ends meet.
2. Create a Monthly Budget
It’s a lot harder to save money in an era where it’s so easy to spend it. You can purchase a new car using your smartphone or book a hotel using a tablet. You can have items shipped right to your doorstep without leaving the comfort of your home.
This is why 79% of Americans shop online. It’s fast, convenient and affordable. Finding deals is a breeze, especially for payday advance loans.
But if you end up getting a payday advance, it’s essential to organize your monthly expenses to ensure you don’t overspend. There are different areas you can cut back to ensure this. For instance, you can use coupons to reduce your grocery expense.
Or bundle services, like your landline, cable, and internet for a cheaper rate. Even better, you can get rid of your cable and phone for a cheap cell phone and Netflix account.
Whatever you decide to do, write down your budget and stick to it until your payday advance is paid off.
3. Find Another Source of Income
And this doesn’t mean you have to apply for a second job. There are various ways you can find another source of income. For instance, you can do odd jobs and offer your services freelance.
This is important if you know you’ll have troubles repaying your loan and affording your expenses for the month. You can search online classifieds to find ads looking for individuals with your skills.
For example, you can babysit a few nights out of the week or help with yard or cleanup work. You can even go as far as to post your own ads promoting the services you offer. Some examples include handyman, mechanic and construction services.
Just make sure you’re providing services legally. If your gig requires licensing, ensure you obtain that before you begin offering your service to clients.
The internet is a terrific resource for finding additional forms of income. Some folks take part in online surveys, writing blogs and offering online tutoring services.
4. Repay the Loan in Increments
The size of your loan can make it difficult to repay your loan all at once. So to help ensure you don’t miss the deadline, you can make small payments over the course of the term.
Let’s say your payday advance is due within a month. If you happen to get paid before then or earn additional income in the meantime, you can use this to make payments towards the loan.
Then by the time the due date comes, you will have an easier time making the full payment. It will also ensure you have some money left over for other expenses or to put away in your savings.
Also, check with the lender to see if there’s a prepayment penalty. This way, you don’t have to pay more than you have to.
If there is a prepayment penalty, calculate how much it will be compared to letting the loan accrue interest. Then go with whichever one is more affordable.
In some instances, you may be able to have your interest rate reduced to make the loan more affordable. So check with your lender to see if this is an option. If you’re having a financial hardship, they may be willing to help you out.
5. Borrow from Your Life Insurance or 401k
Another alternative is to resort to a source of savings. For instance, your 401k. Most employers offer this plan to employees. If you have one, you can borrow against it.
You’re allowed to take out no more than 50% of the participate inside your 401k retirement plan. You don’t want to take out more than you need to repay the loan. This is your retirement account, so the more you take, the less you have for later in life.
Another option is to borrow from your life insurance policy. Again, you only want to take what you need because it’s decreasing the payout your beneficiary will receive in the event of your death.
6. Try to Renegotiate the Terms of Your Loan
If you know before the term is up that you won’t be able to afford your repayment, you should reach out to your lender. Try and see if you can renegotiate the terms. For instance, making a smaller payment or pushing the due date further into the future.
You may even be able to lower the fees and interest. You never know what options are available until you ask. Lenders are more concerned with getting repaid. If there’s a chance of recovering their money by being flexible, then renegotiation may work out for both sides.
7. Borrow from Family or Friends
Sometimes, you need a little extra help, especially during financial hardships. If you fail to renegotiate the terms of your loan and the due date is looming, you can always resort to asking friends and family for help.
8. Charge It to Your Credit Card
Another last resort you can turn to is your credit card. While this isn’t a good idea for paying off loans, it can be beneficial for avoiding defaults and late fees. If this is the only option you have, then go with it.
The interest rates on credit cards are high but not as high as payday advance loans. Cash advances are also available through your credit card lender. However, expect a fee. Speak with your credit card company beforehand to see what the terms are for cash advances.
9. Go for Tax Deductions
During tax season, you can increase your tax refund by making use of certain deductions. There are many different deductions taxpayers can claim on their tax returns, but many fail to do so.
Consult with a local public accountant to see what he or she can do. Then you can use the money from your refund to pay off the payday advance you owe.
10. Try Consolidating Your Payday Advance Loans
A lot of people overlook the idea of consolidating payday advances. While it can be difficult to do, it’s not entirely impossible. There are two ways you can make this happen: use a debt consolidation program or another financing source.
If you opt for a consolidation program, you can find companies that work together with lenders. Their job is to help borrowers lower their interest rates and make payments more manageable.
Lenders work with these programs because it increases their chances of getting repaid. In some cases, the balance is broken up into monthly payments.
Then if you go with another financing source, you can choose to apply for a home equity loan or personal loan. Use the loan to pay off your debts, then all you’ll have is that one loan to repay.
Funding Life’s Expenses
Getting your hands on the money you need to pay off emergency expenses, bills, home remodeling or even vacations is easier than ever. The internet makes it simple to shop around and apply for loans.
At Bonsai Finance, we work with a variety of lenders to find the right credit options for every borrower. This includes small personal loans, credit cards, and payday loans. No credit check is required, so if you have bad credit, this isn’t an issue.
You’re approved based on your income and other criteria. If you need money in your hands quickly, apply now!