A cash advance loan or better known as a payday loan is a small loan that is given to meet your immediate financial needs. Payday loans can be very useful but mismanagement of the funds can lead to debt. Here are some tips from Cashco Financial on how to pay down this type of loan.
Payday loans must be repaid from your next pay, within a month (that is why it is called a payday loan). In most cases, the lender will ask you to link their company to your checking account so that when you receive your next pay, they can deduct their loan from it.
How to parry down a cash advance payday loan
Knowing how to pay off these loans is very essential. Otherwise, there is a good chance that you will end up paying more than you are obliged for. So first, understand how payday loans work. Don’t forget that the payday loan company may apply late fees if you don’t pay the loan on time. Rollover rates may also apply if you request an extension to the pay date.
Read the fine print carefully – Some agreements allow the payday loan company to extend the due date of the loan without taking the customer’s consent. This may sound good to hear but it can cause you to inadvertently accumulate debt. So before you sign or accept any document, go through it carefully. At least then if you sign on the dotted line, you will know what you are in for.
Don’t forget to make a budget – You are going to have to pay the money one way or another. If you have a budget in place, it will become easier to pay off the loan. It will also help you avoid paying late fees. Here are some tips. Consider cooking at home until you have paid the loan off. Rent DVDs instead of going to the theater. This way you will also save on snack prices. Find your own ways to save money.
Pay the loan off on your next payday – Decide that you are going to pay the loan back when you get your next pay. Don’t make any large purchases until then. Remember why you took the loan and use the money for that only. Finally, make sure your account has enough money by the time the loan becomes due.
Prepare for future financial exigencies – For sure, you are going to be short of money in the future. So prepare for it before it comes to that. Open a separate emergency account and keep putting small amounts into it for urgent financial needs. Finally, restrict your payday loan amount. If you take more than you know you will be able to pay back, you are just setting yourself up for default. So limit the amount.
Don’t forget you have to pay the interest too, which can be a substantial amount by itself. So pay the loan back in full when you get your next paycheck. If you don’t, you are going to accrue debt and that is not good for you in any scenario.
If you are unable to pay in full, make sure that you authorize the deductions (if you have given the company access to your salary account). Otherwise, they will take as much as they can.