How to Repay a Payday Loan on a Budget

Some people are afraid of cash advance payday loans because they are under the impression that the full amount has to be paid back on your next payday. This is not necessarily the truth. Some lenders will provide you with extensions and this is one of the things you should look for when searching for a lender.

Here is a way to borrow and repay a payday cash advance loan on a tight budget. First you should research your lenders and find one that will loan the amount you need and has the lowest finance charges and no hidden fees. You should be able to find a lender that charges a finance fee of about $10 per $100 borrowed. This or something close is what you want.

And last but not least the lender should offer extensions. The extension is not absolutely necessary but will serve as a safety net should you find yourself in trouble. I will explain more about this later.

Here is how this system works. For example we will use a $300 payday loan amount. So you apply for and are approved for the $300 cash advance and the full amount is due on your next payday which in this example will be one week. Your budget allows for you to spend $50 per week to repay your loan using this system and the finance charge is $10 per $100 for this example as well.

So now its one week later and the payday loan amount is due. You owe $300 for the loan amount and another $30 for finance charges for a total of $330. So since your budget is $50 then the following is the transaction you will make.

You will pay the $330 in full and then you take the $50 budget and subtract it from this amount so $330 minus $50 equals $280. So now as soon as you pay the $330 in full you will immediately borrow $280 and leave with the cash in hand. This way you have satisfied the loan, spent your $50 budget to repay and carried over a balance of $280.

Now it's your next payday and your cash advance is due again. This time you pay the $280 then subtract your budget of $50 and then borrow $230. Then the next week you will pay $230 and subtract $50 and borrow $180. So do you see how this works now?

Some lenders will not loan an amount less than $50 so in this example when you get down to owing $80 you can choose to only pay the $30 and borrow $50 for the last time which would still leave you owing $60 for your last payment or you can just pay the entire $80 and save that final $10 finance fee. Either way, you can pay off almost any loan amount this way as long as your paycheck will cover the full amount.

This brings us to the extension we talked about earlier. In the event that you can not repay the full amount due then you can fall back on the extension as a safety net. By simply paying the finance charge you can have the full amount extended until your next payday providing you with a safety feature.

As you can see, with this system you can utilize a payday cash advance loan and repay it with out breaking yourself. But you must plan for this and be prepared to pay the finance charges each week which do add up in a hurry. But with this plan you can get the money you need and pay it back without worry and also build your credit rating in the process. This system works great, especially if you have no other way to get your hands on extra cash. In this case the finance fees are well spent.