Fast cash loans can be a quick solution to a short-term money problem. However, with a usually high interest rate of 400 to 600 percent, borrowers should ensure that they repay the loan quickly to avoid being trapped in a vicious cycle of debt.
The no-fail formula for settling fast cash loans is to pay it in full as soon as possible, However, this is easier said than done. Some borrowers have trouble balancing their monthly salary against their monthly expenses as it is, so it is imaginable that they will have trouble finding the extra money to repay the debt.
Hence, the best practice must be before availing of a payday loan, borrowers must have an honest and accurate self-appraisal of their finances. Beforehand, they already must have a clear plan of where to get the money to shell out the exact loan repayment amount - the actual figure plus the interest given the time frame.
Many fast cash loan lenders, especially those that operate online, will get back the repayment in increments by automatically deducting it from the borrower's bank account every payday. While this assures that the payment schedule is followed as the process is already preset, this may sometimes mean that the money that's left on the bank account won't be enough anymore to tide over existing bills and expense. Or, if the borrower loses his job, the lender may continue to withdraw from the account until there's nothing left. These kinds of scenario may then lead to another cycle of borrowing.
To avoid this, borrowers before getting a loan should define clearly where will they get extra money - separate from their take home salary - for financing the repayment. This may mean getting paid for overtime work or taking extra work, side jobs or part-time post. Some people pawn some of their valuable belongings such as jewelry, put up for sale antique furniture or artwork through a yard sale, or put an item for bidding online at eBay. If the repayment amount is too large, other borrowers sell a major property such a car or a small lot that they own.
Borrowers who are serious about getting their loans settled quickly look for additional ways to generate more income while also trying to cut off a significant amount of their expenses during the repayment period. This may mean temporarily letting go of their "wants," such as eating out in restaurants, going to the movies, buying new clothes, or having a vacation.
Through smart budgeting and diligent savings, a borrower can be out of a fast cash loans debt in the nick of time.