Payday loan debt is vicious cycle to be trapped inside. When a person decides to take an advance against his or her paycheck, it’s only inviting trouble. The reason being is it’s difficult for anyone who lives paycheck to paycheck or even within their means to incur such an expense.

The biggest problem lies in the reality that the borrower had to take a loan to cover an unexpected expense. But that money is now gone. Worse yet, their next paycheck will be a lot less because they have to repay the loan. Moreover, they still have to be able to pay for regular living expenses.

The Payday Loan Debt Cycle

This scenario is ideal for cash advance lenders because they are counting on borrowers to eventually make good on what they owe. And a favorite carrot on a stick is to offer borrowers who can’t repay their entire loan on the due date an extension. It seems to be a way to avoid defaulting and going into collections. But what it really is is a way to extract more money from the borrower.

Because the extension fee is usually equal to the amount of interest and does not reduce the principal or interest already due, it’s like free money to the lender. But what it does is put the borrower further into the hole. The more times a loan is rolled over, the more money the lender makes on that same loan.

How to Get Out of Payday Loan Debt

Of course, extending the loan does nothing to reduce what’s owed. So the best thing to do is pay off the loan completely and in one lump sum. Often, this is difficult, but it isn’t impossible.

One way out is to borrow money from family or friends. Even if you agree to pay interest, it will much less costly. Or, see if your church or community organization can help in some way. While you may not get cash, they can help with regular expenses to offset the cost of repaying the loan.

You can also consolidate your payday loan debt and get professional help. The consolidation company will deal with your lender(s) and you just have to make small monthly payments to become debt free.