6 Ways to Pay Off Payday Loans

If you don’t budget correctly or take out payday loans and pay them back on time like you are supposed to, you could get in a little bit of trouble. Payday loan interest rates can start to add up, so we wanted to come up with a list of ways to help you to pay off those payday loans.

The first step in paying off any kind of debt, whether it’s from medical bills, credit cards, or payday loans is to have a payment plan set in place. This way you know how much you are bringing in from work, how much has to go to bills and food, and then what is left can be put aside to start paying off whatever debt you may have.

How to get out of payday loans debt

1. Sell your unused stuff

With online auction sites or even Craigslist, it is easier now more than ever to sell the stuff you don’t really use anymore. If you are selling them online on eBay or similar sites, take into account the shipping charges especially if the item you are selling is large and heavy. In those cases it might be best just to post them on Craigslist in your area as well as the surrounding areas. Other sites like gazelle.com will offer you a price for your technology items and allow you to get the money faster than having to wait out an auction site or for someone to contact you and negotiate the price.

2. Get another job

Surely this depends on your schedule and family dependents, but if you are able to add on a part time job, even if just on the weekends, you will be paying off your loans faster while accruing less interest. Anyone that owns a car that passes certain requirements with a clean driving record could become an Uber driver. In this case, you would only work when you are available to, and on average an Uber driver makes around $19 an hour. If you can just work nights or weekends than this is very flexible for anyone to just make a few trips or to work the entire weekend if you can.


3. Ask for a cash advance from your employer

A lot of companies are willing to help their employees out these days with advanced paychecks, especially if you have worked there for a long time and have a trustworthy stance at your job. If your company doesn’t allow for advanced pay, then you could look into taking a loan from your 401(k) plan. Taking out a 401(k) loan is better than taking a withdrawal from your 401(k), because you will have to pay income taxes and a 10% early withdrawal penalty. But if you are stuck in a case where you have payday loans stacked on top of each other with interest rates building up, then this is still a better way to go.

4. Borrow money from family or friends

While some people may be embarrassed to ask their family members or friends for a loan, it sometimes becomes a necessity if you are unable to pay back the loans. However, if you know you will be unable to pay back a payday loan then you should have went to family and friends to begin with. But if you are able to find a friend or family member that can loan you the money, you can setup a payment plan with them to pay them back which would end up being cheaper if you kept taking out payday loan after payday loan.

5. Change your withholding pay at work

While it may be nice to get a bigger tax refund check every year, you could be hurting yourself by withholding too much money from your paycheck every pay period. By adjusting your withholdings at work you will get a bigger paycheck every week, but be aware that your tax refund check will be a lot lower. To do this you just fill out a new W4 and adjust it so that it doesn’t keep as much in your paychecks every week.


The IRS states that the average tax refund check is about $3000, so if you are around there and are considering adjusting your withholdings, you would get about $250 more every month in your paychecks that can be used to pay off payday loans.

6. Ask your payday lender if they have an extended payment plan

An extended payment plan gives you more time to pay the loan back. Typically, an EPP will give you four extra pay periods to pay back the loan without adding more fees or interest. In addition, you won’t be handed over to collections as long as you continue making your payments each pay period.

If an EPP isn’t available, you could speak to a credit counseling or debt consolidation agency who can help to restructure your balance to pay it back over the course of 6-12 months. However, this isn’t always the case and only about half of clients seeking this restructured payment plan through a credit counseling agency are able to get their payments reduced over a longer period of time to allow them to pay it back.

Always try to pay back your payday loans as soon as possible, which is typically within 2 weeks of getting the payday loan. If you pay them back in this time period than you will likely pay back very low interest rates. Doing it this way is much better than overdrawing at your bank or taking out a credit card advance, which both could accrue higher daily interest rates. When taking out a payday loan just be sure that you will be able to pay it back within 2 weeks, or have a plan like the tips above so you will be able to without having a large amount of interest to be paid after the 2 week time period.

About Kelly Stone

Kelly is a graduate of Northwestern University's Kellogg School of Management with a Master's Degree in Finance. Kelly has 20+ years experience in the short-term lending industry since 1996, having owned 50 storefronts offering payday loans. As President of Snappy Payday Loans, Kelly has built a large network of lenders and is dedicated to ensuring consumers nationwide can find the loan they are seeking. View More