Payday Loan Trap

What to Do If Your Payday Loan Payment is More Than Your Paycheck

I have gotten myself into the payday loan trap.

Is there anywhere that I can look to get help? My whole paycheck now goes to pay the interest on them.

Any advice is welcomed.

Margaret

I am sorry to hear your problem. Payday loans look good on the surface, but they are really a bad way to borrow. This is one of the most expensive forms of credit around.

I assume your credit score is low and that you can't get a low interest loan in an amount sufficient to pay off the payday loans.

If you belong to a credit union, you can try there. Or you can try borrowing from family or friends. Otherwise you might be stuck with finance companies or other sub-prime lenders. But, at least - while these loans will be expensive - you will have one monthly payment that hopefully will be more manageable than the payday loans.

If this is not possible, you should try credit counseling. Look in the phone book for the closest Consumer Credit Counseling Services office. They are located throughout the country. See if the counselor can do anything to help. If not, this counseling is required before you can file for bankruptcy, which might be your only way out.

If you do get rid of the payday loans, go on a very strict budget. Cut out all essentials for a while. Try to increase your income by working two jobs or getting a higher paying job.

Track all your expenditures so you know exactly where every cent goes every day. It is not easy or pleasant, but it is the only way, short of bankruptcy, to save yourself.

I wish you luck.