A loan is a financial liability that can be granted by a bank, other financial institutions (so-called para bank) or even by a private person, which is regulated by the provisions of the Civil Code. And since such a product as an online loan has appeared, this commitment has become even more available.
Payday loans are one of the types of loans. It’s so-called quick cash because it is granted for small amounts, usually, it should be repaid once, after a maximum of 60 days. And although in this way you can usually get no more than a few thousand, customers do not have to provide a certificate of income, confirm possession of permanent employment, they are also not checked in the national bases of debtors. All this makes the temptation to enlist them even greater, and then it is not difficult to fall into the so-called debt spiral …
Since payday loans have appeared online in many para bank offers, taking them has become very easy. And as it often turns out – too simple, because some fall into a so-called debt spiral. What is this? And how to pay back loans online effectively?
Find out how to get payday loan debt consolidation
The first, most important advice is: don’t take another loan online to pay back previous loans. It’s a simple way to fall into a spiral of debt, which we have just explained. What else to do?
First, make a list of all your payday loans. Write out how much you have to pay back and when. People who have debts often try not to think about them, and this does not solve the problem. Then consider whether you are able to take up part-time work to have an additional source of income to pay your debts.
You can also try to negotiate debt repayment terms. What can you apply for? Among others for extension of repayment time or reduction of installments, if any. Loan companies want to pay back, so if the client comes to them themselves, they are willing to make concessions.
The final solution may be a payday loan debt consolidation. It is granted to pay off liabilities. In practice, it looks like that instead of several installments, you regulate one, usually lower than the sum of previous payments. And instead of many payday loans, you have one whose repayment is tailored to your options. And when you manage to regulate it, think twice the next time before you decide on payday pay.
What is a debt spiral?
Debt spiral, debt spiral, debt loop – this is how the borrower enters into more liabilities to repay previous loans. How does this happen? Consumers take out loans and credits and create an overdraft. In a situation where the sum of installments exceeds their income, problems with repayment begin. And then they most often decide on another loan, this time on much worse conditions, because their creditworthiness is lower, which increases the risk. Money usually is not enough for all obligations, and you also have to pay back a new loan. And the circle closes, and it is not easy to get out of such a spiral of debt.
That is why we warn against excessive use of payday loans. They are easily available, but they should be taken into account only in urgent cases, their inclusion must not become a way of life.