Payday Loans and Negotiating Can Help Pay Bills
Americans are using alternative funding
Many people are using payday loans to cover bills. In the post-recession economy people are still struggling to make ends meet. A lot are getting creative with alternative loan options, taking second jobs and extreme budgeting. Despite strategic management of bills, sometimes due to bad luck or bad planning, you may be unable to cover all of the bills. Here are some tips on what to do if that happens.
What to do if there isn’t enough
If you find yourself at the end of the month with not enough to cover bills, there are still some things you can do. First of all, don’t ignore them. This is the single worst thing anyone can do. Ignoring bills is what leads to declining credit scores, late fees and consequences. One of the most important things to do is prioritize. For example, if a rent payment is missed, eviction proceedings can begin within a few weeks.
On the other hand, if you miss an electric bill payment, you may be able to easily negotiate with the provider. Once you note the bills you are potentially going to miss payments on, set out a list of consequences for missing each. Things like shelter, utilities, food, car payments and child care are essential. Most other bills are in the miscellaneous category and can be dealt with on an individual basis.
Contacting key lenders individually
If you can’t pay your bills the next thing to do is to contact your high priority lenders and find out if payment plans are available. The good news is that in today’s recession many lenders have become more willing to negotiate.
Your mortgage. Most mortgage companies have loss mitigation departments whose job is to deal with late payments and financial issues their clients have. The reality is that your mortgage company does not want your home, so they most likely will do what is necessary to help you get back on track.
Your car loan. Next there are your car payments to think about. If you need a car to get to work, then it is imperative that you work out any lag in payments. Again the best strategy is to call your lender and tell them the situation. They are going to be more receptive if you call them as soon as you have problems and have some plan to catch up on accounts in arrears. This is where payday loans may come in handy. These types of loans are specifically built to serve immediate and urgent financial needs.
Your utilities bills. When it comes to utilities, you still have time to negotiate if you act right away. The worst thing to do is to wait. Once you fall far behind your providers are not going to be as willing to work with you. Talk to them right away because most companies have payment plan options. For example, some electric companies have the option to allow you to spread your missed payment over the course of the next twelve months of payments.
Dealing with other lenders
When it comes to other bills, there are other strategies to employ. For student loans, the good news is that the government is on your side. Starting in July of 2009 the government created a program that allows struggling graduates to sign up for payments on up to 15% of their annual discretionary income. Discretionary income is defined as the gross income above 150% of the federal poverty level. You can also call your lender and request a forbearance or deferral. These plans give you the opportunity to put off payments and catch up.
Finally, there are the credit card companies. These are where most Americans fall into trouble with their payments. Overcharging is the single most detrimental thing anyone can do with credit. If you find yourself unable to make a payment, call your credit card company and see what your minimum payment is. You can also use a payday loan here. The fee attached to a payday loan paid off on time is nothing compared to the late fees and bad credit marks you’ll get if you cheat out your lender.
Managing without cash
If you find yourself at risk of missing payments do whatever you can to find a way to negotiate with the lender right away. Most lenders know the difficulties their clients are under and have some plan to help out struggling consumers. Small payday loans, unsecured loans and family borrowing should be enough to get you out of your situation and back on track if you act quickly.