Expert: Joe Montgomery - 6/12/2007

Question
I have several payday loans and I am on a fixed income, how can  I get out with these payday loans?

Answer
Dear Dennis,
The payday loan companies are set up to keep you dependant.  Once you borrow the money, you have to pay it off or roll it over and pay the interest.  There is no way to get out of your loan with them.  You must pay off the loan, and then NOT open one again.  If this is costs you to be short money for a couple of weeks, then you have to pay that price to get out of the loan.  
The only other idea I can offer is to maybe take a lesser amount each time with the goal of eventually paying it off without adding another loan.  If you borrowed $500, and owe $575, next time, borrow $400-450, and then the next month go to $350, and so on until you can just pay it off.  If you don't do something, you will end up paying 3 to 6 times what you borrowed in interest per year!