There are a few different approaches to paying off a payday loan, including asking the lender for an extended payment plan (EPP) to allow for more time to pay off the loan before incurring penalties, reports Credit.com. Only certain lenders, particularly one that is a member of the Consumer Financial Services of America (CFSA), may be willing to offer an EPP. One common piece of advice for payday loan borrowers is to consult a nonprofit credit counseling service for advice on repayment.
One way for payday loan borrowers to repay their debt is to rely on other forms of credit to free up cash to pay off the loan debt. Individuals with credit scores under 700 may need to use a secured credit card until they can build their credit score high enough to qualify for more traditional forms of credit, notes Magnify Money.
It is important to try to pay off more than just the minimum monthly payment for a payday loan each pay period. Even just an extra $10 every pay period can help stop the debt and repayment cycle. This may require most payday loan borrowers to make a budget, and it may require cutbacks in some areas. If it is possible to lessen other monthly expenses such as rent, this can be a good way to get extra cash to pay off the loan.