Can't Pay Back Your Payday Loan? Stop The Payday Loan Cycle Trap Now!

If you are saying to yourself "Help, I have taken out too many payday loans and I can't pay back my payday loans," you are certainly not alone. Ok, so you have taken out a payday loan that you either could not afford in the first place or cannot afford to pay back when it's due and you are taking out other payday loans just to keep current on your first payday loan.  You my friend, have been caught in the pay day loan trap. What many payday loan borrowers call "payday loan hell."  This happens, and it could have happened for many reasons. So don't beat yourself up, just take steps to fix the problem and try not to get back into this situation again.


What Is The Payday Loan Cycle, Affectionately Called "Pay Day Loan Hell"?

As briefly described above, the payday loan cycle is when you have taken out a payday loan and find that you cannot pay it back on time for one reason or another. In order to make your payment deadline and not incur more fees or even collection activities, many people get another payday loan just to cover the payments on the first one or pay it back. Then they end up owing another payday loan.  They may keep repeating this cycle, putting themselves further and further into pay day loan debt.  This practice is what a lot of law makers try to use to ban pay day lending in their state. 

However, these law makers have money so they don't understand why someone would need to take out a payday loan to keep things moving until their next paycheck.  Thus they make these laws that do not benefit the people that really need it.

Truth be told, although the interest may be considered high in the long run, paying back $15 to $25 for every hundred dollar you borrower is reasonable especially for those who are really in a jam and need money quickly.  There are other options, such as the $10 payday loan which means you pay back $10 for every $100 you borrow. It is a fixed interest payday loan.  There are many options when it comes to payday lending. Borrowers just need to become more educated about the choices they have.

One important thing you should remember if borrowing money from a payday lender is to make sure they are a member of CFSA.


What Can I Do To Stop The Cycle or What Can I Do If I Can't Pay My Payday Loan Back?

The first and most important thing you can do if you can't pay back your payday loan is to ask for an Extended Payment Plan. This lengthens the time that you have to pay back your loan so you don't have to feel overwhelmed by the pressures not being able to pay back your loan in time or having to take out another loan to pay for the first.

According to the Community Financial Services Associations Of America (CFSA), a recent study from Clemson University says there is no merit to the myth that borrowers get trapped in a payday loan cycle which they cannot get out of. This myth is what a lot of law makers use to try to ban payday lending in their state. However, payday loan companies who are registered with CFSA are obligated to extend your payday due date upon request.

What is CFSA?

According to the Community Financial Services Association of America website (, as of April, 2012,  "The Community Financial Services Association of America (CFSA) is the national organization dedicated to advancing financial empowerment for consumers through small dollar, short-term loans. Now in its 12th year, CFSA was established to promote laws and regulations that protect consumers, while preserving their access to credit options, and to support and encourage responsible payday advance industry practices."

So it's fair to say that those who get caught up in the payday loan cycle of pay day loan hell either don't know about the extended payment plan option or have are dealing with a lender who is not a part of CFSA.

According to CFSA, more than 19 million Americans count on payday loans as a trusted form of short-term lending and processes such as the Extended Payment Plan keeps things flowing well between payday loan lenders and borrowers who need more time to pay their loans so they do not have to take out another payday loan to pay the first one back.

How To Take Advantage Of The Extended Payment Plan For Your Payday Loan

  • If you are behind on your payday loan payment you must request an extended payment plan (EPP) by the close of business on the last business day before you loan payment is due.
  • You must sign an amendment to the loan agreement that shows the new payment schedule
  • You  may pay the payday loan balance in four equal payments coinciding with periodic pay dates.
  • There is no charge to enter into an EPP but if you default on your new arrangement, the pay day lender has the right to charge you an EPP fee and ask for the balance of you loan to be paid immediately.
  • No collection procedures will take place while you are enrolled in EPP as long as you are paying as agreed by the new arrangement. 
  • You are allowed to use EPP at least once in a 12 month period per payday loan lender.
  • Contact for further detail on the extended payment and the laws that govern them.


How Can I Prevent Myself From Having To Borrow Money In The Future?

No one knows what the future holds so borrowing money may be inevitable. However, you can take steps to help yourself have money when you need it by starting an emergency cash fund.  What is an emergency cash fund? It is money that you put away specifically for emergencies.  I know you are thinking, I don't have enough money to live on now, how can I save an emergency cash fund? You can put away $50 to $100 or more per month or anything you can afford-it will add up.  This way, when you need emergency cash in the future, you can borrower from yourself and pay yourself back.  There are ways that you can save for your emergency cash fund without dipping into your current income.  Read more about emergency cash funds: PRESS HERE

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