Costly Debt Traps-This the Way to Avoid Them

There are many reasons why people go for payday cash advance loans but it draws down to lack of other options to raise money. However, while the cash advance facility meets you at your most desperate moment and makes things much better, it is not one to rush into, especially if the bill or need can wait. The reason is because a pay day loan advance is quite expensive to service and getting quick cash into your hands comes with a price. For those with debts, it is important to explore other available options first to avoid costly debt traps. Those individuals unfortunate enough due to excessive debt have a number of ways to deal with the problem.

Borrowing from family and friends

While this is the default borrowing option for some, a good number see it as a very difficult way of raising money. Friends and money do not go very well and relationships are broken if the loan goes unpaid. No matter who the person is, the hard lesson is that your relationship changes forever. 

Debt consolidation

Through this facility, a single loan is used to help deal with all the glaring bad debts. Debt consolidation allows a person to manage all debts effectively. Having debts from so many creditors make it rather hard to track or manage payments and budgeting is next to impossible. 

Creditors’ negotiation

Some people almost go bankrupt as a result of too much debt and negotiations with creditors is a wonderful idea. The creditors can reduce the owed amount towards a full payment. It is also a better idea if your debt amount is large and you owe multiple companies a hefty sum of money. 

Bankruptcy

Once you have exhausted all the other available options, it is hard not to file up for bankruptcy. In turn, you become radioactive in the financial and business world and cash advances and no one really want anything to do with you. A bankruptcy changes your life completely, thus should be the last resort. 

Credit cards

Sometimes people find it convenient to have multiple credit cards they use to pay college fees for their children, buy new cars, home amenities, clothes and basically anything they desire ending up with a seemingly insurmountable credit card debt. While many end up with ever increasing interest rates and loans, it is possible to completely pay back your credit card debt. The best way of dealing with such a debt is lowering the interest rate and finding other ways of boosting your entire income, cutting expenses and using the additional money to expedite the payoff.

At times, the balances are on more than one card and the best idea is attacking the debt with the highest rates. Starting with the card with the smallest balance and clearing it fully might also give you the much needed psychological boost to also weather on and complete the others. If you have a good credit record, you can receive offers from credit card companies for zero interest when it comes to balance transfers, meaning you will pay the debt faster since the interest rate is eliminated for a period.

About Author

Mark is a business graduate working for a leading financial brokerage firm in Sydney. He occasionally blogs in his free time on how Jet Lending cash loans can help in getting much needed cash in troubled times and how to ensure you repay to avoid hefty penalties.