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I have made some big money mistakes. I have taken cash advances out from two different companies in the last year and am now buried under payments because I have to keep taking the money out to make ends meet. Should I apply for a personal loan to pay them off? Or slowly catch up?
Your story is not uncommon. Lots of people have gotten into this same bind because cash advance companies are set up to make money by charging very high interest rates. People who can’t pay back the interest and original loan have to keep taking out more loans to keep up with payments.
The good news is that there is a way out. Now is the time to adjust your spending to stop from getting deeper and deeper into debt. Here are some ideas to help you get back in control of your money:
1. First, stop getting further into debt:
Don’t take out another cash advance or payday loan. Cut your spending so that you can get by without taking another cash advance.
You may find that the only way to improve your situation is to drastically cut your spending until you get caught up. If you haven’t kept track of how you spend your money, now is the time to start. Write down everything you spend money on for the next 1-4 weeks. Then review your list and decide how you can cut back on expenses.
2. Next figure out a plan to repay what you owe:
It sounds like you might be considering a personal loan, but that will also be expensive---and add to your debt. Also with your current cash advance loans it may be difficult to qualify for a personal loan.
If you would like help working out a repayment plan, consider consulting a credit counseling agency. The credit counselor can help you figure out your options. If appropriate, they can offer you a debt management plan. Many credit counseling agencies offer personal appointments or consultations on the phone. Be sure to find out if they charge a fee for their services—many are free, however some are not.
In selecting a credit counseling agency, only select one that is certified by the National Foundation for Credit Counseling. A listing of certified credit counseling agencies is available at: http://www.nfcc.org/. On this website, you can search for credit counseling agencies in your area by zip code.
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