It is a very simple thing to have problems with payday loans initially. In an emergency situation, if you borrow $150, you might have to pay $25 fee. You’ll be relieved to get such a quick cash in your hands. But after two weeks, you’ll be helpless and there is no way you can pay off the $150 loan. So, you have to pay again $25 to extend your loan. And in the coming months, if you keep paying and paying to extend the loan, unfortunately, you’ll never see your debt go down.

In the next 12 months, the picture would be - you have already paid $650 as fees, and you still owe $150. Tell me, is this legal? And how can you get out of it?

It is legal, and you’re one of the many victims. A recent study conducted by the CFPB revealed - more than 80% of people opted for payday loans and now can’t pay off their loan after the end of the term (that is, 14 days). Instead, they’re continuously paying the fee. So what you have to do is to follow the given steps; it’ll help you to deal with your payday loans and get rid of your debts.

1. Don’t be afraid

Payday loans are normally taken as a way of funding some unexpected one-time off expense. But in reality, 4% of normal consumers opt for payday loan just to pay off essentials costs like food, fuel and transportation. 25% of those people takes a payday loan to repay other credit. If you’re having issues with payday loan debt and can’t manage, don’t worry! You’re not the only one.

2. Avoid borrowing any more

A payday loan is like a trap where people fall into because of not being able to afford it. But if you feel that there’s no way out from a payday loan trap, it will be a wise decision to avoid taking out more new loans again and again.

You need to stop the loop! Continuously taking out loans will only increase your problems further. By drawing limit, you can keep yourself safe from slipping deeper into debt. You can manage the debt if you can think positively.

3. Cancel the CPA payday loan payment

A payday loan is not a high-priority debt that you should pay before saving the money for your other priorities like house rent, home loan, utility bills, food cost, and household costs. If paying back the payday loan hampers your budget and you’re getting short of money to meet your other priorities, then you must stop using that money towards payday loans.

At the time of applying for the payday loan, you might have given your card details to set up a continuous payment authority (CPA). This is how most payday loan lenders receives the repayment from you.

So, what should you do now?

• On the due date, call the bank and ask them to cancel the payday loan payment
• If the due date is 1 to 5 days away, email a cancellation letter to the bank
• If the due date is more than 5 days away, send the cancellation letter to the bank by post

You must keep the payday loan lender company in the loop and send a copy of the letter too. Do this after the bank has canceled the CPA.

4. Pay off as per your affordability

Don’t let the payday loan lender to overpower you through their collection process. Actually, legal payday loan lenders can take actions if you can't pay off the debt.

5. Try to avoid payday loans

With expert debt advice and budgeting you can manage your financial status and stop the debt cycle. You need to budget for priorities, rectify any errors, manage future payments and then you’ll be able to get proper debt solutions to manage your debt over the longer-term.

See also: Payday loan debt consolidation - Way out of payday hell