The key is to shop around and find a loan at the most affordable rate and with the most favorable possible terms.

If you’re able to get a personal loan, you can significantly reduce the interest rate and borrowing costs you pay compared with payday loans. More of your money will go towards paying down your principal balance so you’ll actually be able to make a dent in paying off debt.

And personal loans come with fixed repayment schedules that usually give you several years to pay off your loan. This extended repayment timeline can make your monthly payments more affordable. That way, you don’t end up having to borrow more money when your paycheck doesn’t stretch far enough to pay everything you owe plus cover expenses.

You can also use other types of loans, such as home equity loans, to consolidate debt — but these can be more time consuming to qualify for, come with higher closing costs, and put your house at risk as collateral.

Commit to not borrowing any more

Once you borrow with a payday loan, the high fees and short repayment timeline associated with your loan can sometimes make it difficult to stop borrowing. In fact, many people end up taking one payday loan after another or even taking multiple payday loans at the same time. This can quickly lead to financial disaster when a big portion of your paycheck is promised to lenders before you even receive it.

Unfortunately, the bottom line is that you cannot borrow your way out of debt — especially with high-interest loans such as payday loans. You have to break the cycle by not taking out any more loans. However, this can be really difficult if your paycheck isn’t stretching far enough due to the payments you’re already obligated to make.

The best way to make sure you don’t borrow any more is to make a detailed budget that you live on. Figure out what your income is each month and add up all of your essential expenses and discretionary spending. You’ll need to make sure your spending and expenses do not exceed your income. If they do, you’re going to have to keep borrowing forever and will never be able to get out of payday loan debt.

If your income doesn’t cover your expenses, start looking for places to cut spending. This may mean clipping coupons to reduce your food budget or getting a roommate to make rent more affordable. If you have a drastic shortfall in the amount of cash available to cover expenses, you may need to really cut spending to the bone — but it’s necessary to do this at least in the short term so you can climb out of debt.

If you really want to pay off your debt ASAP, making extra payments is essential. When you make extra payments, it will cost you less in total to pay off your debt, as well as reduce the time it takes until you are debt free.

Paying extra on your loan will reduce the balance down more quickly because all of the extra money goes towards principal. And the more you reduce your balance, the less interest you’ll pay since interest is being charged on a lower amount.

You can make extra payments by living on a careful budget that cuts expenses. You can also look for extra cash to boost your payment. To find some extra money to pay down your payday loans, consider:

  • Doing overtime
  • Working a side gig
  • Selling stuff you don’t need

Consider bankruptcy

Sometimes you may not be able to come to an agreement on a repayment plan that makes payday loans affordable for you, and you will not be able to get a new loan that makes paying payday loans affordable.

If you find yourself unable to make payments and still cover your essential monthly costs, you may have no choice but to try to settle your debt or to declare bankruptcy.

Debt settlement involves reaching an agreement with creditors to pay off less than the total owed and have the rest of your debt forgiven. Debt settlement attorneys or debt settlement companies can negotiate this type of agreement with payday loan lenders — but you will have to pay fees.

You can also try to negotiate this type of agreement yourself by letting payday loan lenders know you have no ability to pay as promised. If you can offer a lump-sum payment of part of your debt in exchange for having the rest of your debt balance forgiven, this approach often works best.

Just be aware that lenders usually won’t agree to a settlement unless you’ve missed payments — and that debt settlement hurts your credit score. You’ll also want to get your agreement in writing before you pay anything.

If debt settlement won’t work and payments are unaffordable, bankruptcy may be your only answer. Bankruptcy will allow you to discharge eligible debts, including payday loan debts.

The process by which debts are discharged varies depending whether you file Chapter 7 or Chapter 13. Chapter 7 requires you to give up some assets to the bankruptcy estate so creditors can be partially paid. Chapter 13 requires you to make payments on a payment plan over three to five years before the remaining balance of debt is forgiven.

Bankruptcy hurts your credit score, but it can allow you to get out of a deep hole if you have lots of payday loans and other debt you can’t afford to pay. Once you’ve had your debt discharged in bankruptcy and it’s not collectible anymore, you can start working on rebuilding your credit. This can be done over time by living within your means and getting a secured credit card you pay on time to develop a positive payment history.

How can you get your payday loan debt paid off?

Ultimately, there’s no one right approach to getting payday loan debt repaid.

Entering into a repayment plan makes sense if your state requires lenders to allow them or if your lenders are willing to work with you. Taking out a new loan at a lower rate to pay off payday loan debt can work if you’re able to qualify or have a loved one who will let you borrow. Paying extra on your loans is possible if you can work more or sell extra items to come up with more cash.

But if none of these options work for you, debt settlement or bankruptcy may be the only way to finally break free of payday loan debt.

Consider each possible option carefully, weigh the pros and cons, determine which solutions are viable, and then take action. Start working on your approach today because you definitely want to get your payday loans paid off ASAP before they cost you even more money.