If your lender is a member of the Community Financial Services Association of America (CFSA), the chances that they offer extended payment plans is quite high. Be sure to ask before your loan’s due date – last business day at the latest.
Before you do sign a repayment plan, be sure to read and understand all of the terms. There’s no such thing as a free lunch, so they may replace one evil with another. An extended repayment period might come at the price of higher interest.
There are home equity lines of credit (HELOCs), credit card loans, and other personal loans designed for paying down larger loans.
For most of these, you’ll need to have some credit history – probably a 580 credit score at a payday loans Bolivar Tennessee minimum. Check your credit report from one of the main credit bureaus – Experian, Equifax or TransUnion first – many services such as Credit Karma offer this for free. Be wary of other credit bureaus, as they tend to be more scammy.
5. Get a Credit Union Payday Alternative Loan
Federal credit unions are financial institutions that tend to be smaller and less profit oriented, since they don’t have shareholders. They often offer “payday alternative loans” (PALs). Here are some facts about PALs, courtesy of NerdWallet:
- Issued to borrowers who have been credit union members for at least one month.
- Granted in amounts between $200 and $1,000.
- Affordable, with a maximum annual percentage rate of 28% and an application fee of no more than $20, which reflects the actual cost of processing.
- Repaid fully after one to six months of installments; no rollovers allowed.
- Provided to borrowers one at a time; borrowers may not receive more than three PALs within a six-month period.
NerdWallet also mentions that these loans are not very common; only 1 in 7 credit unions offers them. The best way to learn if a credit union offers these types of loans is to call them.
6. Look into Nonprofit Credit Counseling
Finance is not easy, and payday loans are among the toughest to comprehend. A credit counselor is a personal finance expert that can not only help make sense of all the fine print but help you create a plan to get out of the debt cycle.
However, if you’re in payday debt, you’re probably not in a position to shell out a bunch of cash to a credit counseling agency. Fortunately, there are a number of nonprofits that offer debt counseling and financial planning free of charge.
Many military bases, credit unions, local governments and universities offer some sort of credit counseling. It can’t hurt to call around to see what options are available to you.
Typically they are not going to have a silver bullet for you. But they can sit down with you, help you understand your financial situation, and set up a budget for you to help you get out of debt. The hard work is actually sticking to that budget.
Be very careful of companies masquerading as nonprofits. This world is full of scam artists. Do your homework to make sure that there is a real organization behind the offering. If something sounds too good to be true, it probably is.
7. Ask Friends and Family for Money
One option for getting money to pay off your loans is to ask your friends, family, and community. It can be extremely humbling to do this, but a no-interest loan from a friend can go a long way into helping you get out of the payday loan trap.