Getting Rid of Your Payday Loans

Getting Rid of Your Payday Loans

Written by Caitlin Wood
Last Updated November 5, 2021

The payday loan cycle is an unfortunate thing to get trapped in and unfortunately every year hundreds of desperate Canadians find themselves stuck with no real solution in sight. The story is almost always the same when it comes to getting stuck in the payday loan cycle; a financial emergency appears out of nowhere and there isn’t any cash to cover it.

When you’re short on time and cash, more often than not, a payday loan can seem like the perfect solution, but once the emergency has been dealt with, you’re stuck with a payday loan that needs to be paid off as soon as possible. All of a sudden you need to get a second payday loan just so you can pay off your first payday loan, this is where the cycle begins and if you’re not careful the fees, interest, and other random charges will start to add up and you’ll be forced to continue to get new payday loans to pay off old ones.

Everything you need to know about payday loan alternatives.

This is an all too familiar situation and we want it to stop now. Payday lenders prey upon people just like you who find themselves in a desperate financial situation, so if you feel trapped by your debts or like you’ve lost control of your finances because of payday loans, we want to help you:

  • Stop the payday loan cycle
  • Get back on track
  • Create a plan and a budget
  • Explore your options
  • Offer advice on debt consolidation
  • Avoid bankruptcy if possible
  • Save you thousands on interest
  • Regain control of your money and your life
The Payday Loan Cycle

How to Pay off Payday Loans

Paying off your payday loans is not impossible but it will take hard work and time. Everyone’s situation is different, but if you follow the steps below we know that you can take back your life, get rid of your payday loan debt and break the cycle.

Step 1: Regroup

We want you to stop, don’t panic and regroup. We understand that realizing your payday loan debt has gotten out of control is a scary thing but you need a clear mind to plan your attack. Thousands of Canadians have been in the exact positions you’re in now so don’t beat yourself up about it.

Step 2: Calculate

Now is the time to figure out exactly how much you owe. Find all your paper work and payday loan documents and add them up, knowing the exact amount you owe will give you the motivation you need to work hard to pay if off.

Make sure you know your rights when it comes to payday loans.

Step 3: Pay off

You need to pay off as much as you can, as soon as you can. Payday loans come with seriously high-interest rates, so the sooner you pay them off the better. Obviously you’ll have to constantly be working on this step, but it’s very important that you start working on it right away.

Step 4: Earn More Money

Easier said than done, we know. But if you’re committed to paying off your debts and getting out of the payday loan cycle you’ll be more motivated to do what needs to be done. Find a second job, pick up some extra hours on the weekend, or start selling a few items from around your home. Allocate every last extra dollar you have to pay off your payday loans, getting out of the cycle as soon as possible is your number one goal.

Step 5: Find Alternative Loan Options

The reason you find yourself stuck in the payday loan cycle is probably that you needed a loan really quick to cover an unexpected expense. Unfortunately, a payday loan is the quickest way to get the cash you need, that’s why so many people end up stuck in the cycle. What you need to do is figure out a better alternative. Short term instalment loans from private lenders are almost always a significantly better option than payday loans. You could also consider asking a friend or family member for a loan next time there’s an emergency, we understand that this is an awkward situation but it’s so much better than being stuck in the payday loan cycle.

Check out how borrowing a payday loan differs from a personal loan.

Step 6: Consider Debt Consolidation

If your payday loan debt is extremely high then you might want to consider debt consolidation. You’ll work with a company that will gather together all your debt and you’ll only need to make one affordable monthly payment. Debt consolidation companies still charge interest but it’s nowhere near as high as payday lenders. Debt consolidation is a good option is because it can alleviate the stress associated with dealing with payday lenders.

Step 7: Set a Budget and Stick to it

Cut back your expenses as much as possible create a new budget based on debt repayment and stick to it. These three steps are extremely important as they are the key to getting out of the payday loan cycle. It’s going to be hard and it will take a long time, but we guarantee that it will all be worth it in the end once you’ve broken the payday loan cycle and can say that you’re officially debt-free.

Budget Breakdown

Take Back Your Life Today

Getting out of the payday loan cycle once and for all will be the greatest feeling so start working towards it today. If you’re looking for an alternative to payday loans or need help tackling payday loan debt, Loans Canada can help.

Rating of 5/5 based on 1 vote.

Caitlin is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security. One of the main ways she’s built good financial habits is by budgeting and tracking her spending through the YNAB budgeting app. She also automates her savings so she never forgets to put aside a portion of her income into her TFSA. She believes investing and passive income is key to earning financial freedom. She also uses her Aeroplan TD credit card to collect Aeroplan points so that she can save money when she travels.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Make Smarter Borrowing Decisions

Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.

Save With Loans Canada

Special Offers

50 Free Trades Offer

50 Free Trades Offer
Ends August 31st, 2022

Almost $500 in commission-free trades. Code “50TRADESFREE”. Conditions apply.

View Offer
Borrow Today, Don’t Pay Till July

Borrow Today, Don’t Pay Till July
Limited Time

Borrow $500-$50,000 from Fairstone by May 31 and don’t pay until July.

View Offer
Build Credit With Refresh

Build Credit With Refresh

Build credit while spending money with the Refresh Financial VISA card.

View Offer
Build Credit For $7/Month

Build Credit For $7/Month

With KOHO’s prepaid card you can build a better credit score for just $7/month.

View Offer
Industry Spotlight

What's happening with Canada's credit industry?

addy ⎯ Making Real Estate Accessible To All Canadians

addy ⎯ Making Real Estate Accessible To All Canadians

Check out our interview with addy; a platform that allows Canadians to invest in different properties across Canada with as little as $1.

Read Post
Find The Best Rate
In Your Region
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Keep Track Of Your Credit Score

Subscribe with Credit Verify to monitor your credit rating and get your free credit score.