Resolving Payday Loan Debt

Resolving Payday Loan DebtPayday loans can be incredibly useful when facing a temporary financial crisis, but tough times can pile up on anyone, necessitating multiple payday advances. If a consumer is unable to pay on the agreed schedule, debt can mount to a point where it seems completely out of control. Luckily, there are a few strategies to help pay off payday loan debt and get back on track.

Use Your Resources

If you have a credit card, you may be able to obtain a cash advance to pay your payday loan debt. Also, working extra hours or overtime, working a second job or odd jobs (like babysitting, tutoring, or dog-walking), and/or selling unnecessary or extra items online or in a garage sale may bring in some extra cash. Alternatively, your employer may be willing to advance you the funds from your next paycheck.


The simplest answer is to borrow money from a friend or family member if possible. Know the total amount needed and propose a payment plan that you are positive you can stick to, and offer a reasonable interest rate. Be sure to keep your agreement so the relationship does not become stressed while you pay off your payday loan. If you owe thousands of dollars in payday loans and own a home, consider applying for a secured debt consolidation loan, which is a home equity loan with a low interest rate. It is risky to borrow against your home, so be sure you will be able to handle your current bills along with the loan payment.

Community Financial Services Association of America

If your payday loan is through a lender associated with Community Financial Services Association of America (CFSA), a consumer protection agency that deals with payday advances, several more options for payday loan repayment become available. Member payday advance lenders must offer extended payment plans for debtors who cannot make their full payment in time. Alternatively, check the National Conference of State Legislatures website to see if your state provides the legal right to request an extension. If you are able to ask for an extension under either provision, write a letter requesting an extension that states when you will be able to pay your payday loan in full and outlines a manageable Resolving Payday Loan Debtpayment plan. Make sure your repayment promise is within bounds of your current budget. Inform the payday lender that you do not authorize any further ACH debit actions to collect on your payday advance debt. Keep a copy for your records along with your payday loan documents. Present the letter to a branch manager at least 5 days before the loan is due. Explain your situation and propose your repayment plan. If the manager agrees to your payday loan repayment strategy, you must not miss a payment. Payday loan companies are not required to accept requests for an extension.

If these options fail, you may need to consult a lawyer and possibly consider bankruptcy. This article does not in any way, shape, or form constitute legal or financial advice, and is no substitute for consultation with a lawyer or financial advisor.