The payday trap
Payday lenders make money on rollovers, not resolution. Every rollover adds fees without reducing principal. An extended payment plan (mandatory in many states) or a personal loan at any reasonable rate is almost always cheaper.
Payday Loan Escape
APR-adjusted payoff plan to stop rolling over payday loans.
Results
Months to payoff
Never at this payment
Total interest
—
Monthly interest (now)
$233.33
Action
Consolidate to a personal loan
Insight: A payday loan rollover fee of $15 per $100 is ~400% APR. Even a bad personal loan at 30% is 10× cheaper.
Frequently asked questions
1.Is payday loan debt forgivable?
Rarely — but state usury laws can void illegal loans. Check your state's payday loan cap.
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