Well we moved into a cheaper home so we could get ahead of bills but somehow didn't get ahead. I am now in debt with atleast 9 payday loans, overdue credit card bills and medical bills...and just don't know what to do. I don't know how the heck to get under these darn loans and I'm seriously thinking about closing my checking account so they can't take any more money from me.. Someone please offer me some sort of advice. Thanks!
One thing to do is quit spending all your money. How in the world did you get NINE payday loans??? Were those loans to pay off loans??
What is your effective interest rate on your payday loans? How much total did you actually borrow to apply to other expenses, vs. how much do you pay them each month that does not pay off any balance?
North Carolina has been shutting down payday lenders: http://www.ncdoj.com/DOJPublic/Docu...ory=PressReleases/&file=paydaylenders3.06.pdf
"One thing to do is quit spending all your money. How in the world did you get NINE payday loans??? Were those loans to pay off loans??" I'm trying to save every penny I make and honestly we dont buy anything we dont need. Just groceries her and their...formula and diapers and such. I had gotten 2 loans to help pay a car payment and rent when i had my son but then bills just started piling up . I used my tax check to pay most of them off but then started racking up bills again. The moost recent loans were loans to pay loans. "What is your effective interest rate on your payday loans? How much total did you actually borrow to apply to other expenses, vs. how much do you pay them each month that does not pay off any balance?" Most of the loans are between 300-500%..most of my initial principles wre between 200-400..60 dollar payback on a 200 loan and 120 on a 400 loan...i was just paying the interest and im sure i have paid atleast double of what the principle has been.
The longer it takes to get the payday loan monkey off your back, the more it will cost you. Cut all non-essentials. No cable, no paper, do not renew magazine subscriptions, no books, no coffee, no restaurants, no movies. No nonessential travel, no vacations away from home. Goodwill has cloths, and the baby won't care. Want entertainment? Go to the library, or church, or parks. Live like a student. Is your car more than several years old, with little resale value? Pay for liability, but drop collision insurance. Your collision insurance is worth little anyway. How are you commuting? Is there a cheaper way? Carpool? Is your wife working, requiring child care? It may not pay. Or only if you can handle child care yourself. Second job? Better paying first job?
"I used my tax check to pay most of them off but then started racking up bills again. " If you have a significant tax refund, you have too much withholding. You are giving the government a free loan, even as you are paying 500% APR to loan sharks. There are no brownie points for loaning the government free money. Too generous! Especially with a new kid, make sure you recalculate your withholding, both state and federal. You want nothing back when you file, maybe a slight payment due. You might have a couple hundred dollars extra cash flow each month to pay off debt. Just as profit compounds, so do losses. Your "rate of return", on paying off debt that is costing you 500%, is 500%. You can either spend the rest of your life in indentured servitude, or get rid of this debt as fast as possible.
