While there are many situations where a payday loan is a perfect resolution for a financial crisis, it can lead you into an endless cycle of borrowing that will keep you paying off those loans for months, or even years to come. If you find yourself needing to take out a new payday loan just to pay off the old one, and your debt and payments are piling up, you may want to try and settle out your leftover payday loan debt. So what type of action does this settlement require? Here’s a breakdown.
Decide if You Want to Go Solo or Have Help
When it comes to settling payday loan debts, you really have two main options. You can either reach out for help from a company that specializes in settling this type of debt, or you can give it a shot on your own. If you are tenacious and you know what you want, who to contact, and are willing to learn as you go, you should be fine trying to find out the amount they’re willing to settle on. However, if you’re timid, don’t like negotiation, or find it difficult to converse with these companies, then you may want to contact one of the settlement companies. Just make sure you have all of your loan information in front of you before starting any phone calls so you have totals, interest, and fees right there for when you’re asked.
Explain Your Situation
No matter which method you decide is best for you, you need to be able to explain your financial circumstances. They will want to know what has caused you to get into the situation you are currently in, and if there is any hope of that situation correcting itself in the near future. Most lenders and settlement agencies understand that if you get to the point of filing for bankruptcy that their debt will not be paid off at all, so they would rather settle with you for less than what you owe than get nothing at all. Telling them the truth about your situation is important, as the more they know, the more they will be able to help.
Negotiate a Settled On Amount to Repay
Once they know the situation, they will often tell you a sum that is the minimum of what they’ll accept to settle the debt. Keep in mind, this may not actually be the minimum, so if that sum is still above what you can manage, negotiate for a lower amount. Once the two of you have found an amount that you can agree upon, then it is time to make the payment to settle the debt in full. You can usually repay the settled amount in two or three installments if they are close together, otherwise lenders will require a single lump sum to pay off the debt.
Taking the steps to settle that debt could leave you with a few dollars left over at the end of each month that you could either save or use to pay off other debts. Don’t be afraid to ask for a settlement if you are truly in a situation where this cycle is ruining your ability to financially care for yourself. It really can help make things easier to handle.