It's always a good idea to pay off your debts promptly to save money on interest, but it's critical with payday loans since they come with relatively short repayment terms. Most payday loans must be paid back after only a few weeks or months at the most, which means it's easy to have another financial emergency that interrupts your plans to settle the first loan. Stay out of the cyclical borrowing habit by using these tricks for paying off that initial payday loan before its due date.

Negotiate for Better Terms

Start with the simplest way to reduce what you actually owe the payday lender: ask them for a discount. If you've never missed a payment or have only taken out a small amount for your first loan, use these facts to your advantage to negotiate lower fees or interest rates. Even if you can't get your lender to agree to trim off a little of what you owe by renegotiating the terms or giving you a discount, you won't lose anything by asking.

Track Early or Extra Payment Penalties

Most payday loans want you to stick with the original payment plan drafted when you first borrowed the money. Yet paying off your loan in a lump sum or making a few extra payments per month could really help you save on interest charges and get the debt off of your mind sooner. Compare the money you're saving to the penalty for the payment variation. For example, a loan with a high interest rate and a $75 early payment fee could still be worth paying off as soon as possible if doing so saves you more than $75. This is one part of the contract lenders tend to be most flexible about negotiating over, since offering to pay early means you won't go into default and cost them more money in the long run.

Borrow from Lower Interest Sources

Payday loans are essential for those times when you can't get money from another source before a quickly approaching deadline. However, don't forget about your other options when the urgency of the original financial hardship passes. By borrowing money from friends, a peer to peer lending group, or even your own life insurance policy, you can settle your high interest debt quickly before it grows any larger. Even moving the debt onto a credit card through a cash advance could help you settle the loan immediately without having to find an extra source of income.

Automate the Payments

When you know your bank account is going to have a smaller balance tomorrow due to your automatic loan payment withdrawals, it's a little easier to resist the temptation to make a purchase outside of your budget. Instead of just setting up withdrawals for the minimal payment amount, ask the lender to set the withdrawal a little higher than necessary. You'll quickly adjust to the new amount being removed on a weekly or monthly basis, and the debt will go down faster than if you stuck to strictly minimum payments.

Use Unexpected Windfalls

Finally, develop an iron will and strong focus when it comes to financial windfalls like income tax returns, bonuses from work, and gifts of inheritance from forgotten relatives. It feels great to splurge on yourself when you end up with an unexpected $500 in your pocket, but think first about how much better you would feel in the long run with your payday loan debt settled. Using a windfall now to wrap up a short-term debt is the best way to spend less in the long run by reducing penalties in interest. Remember that spending less will allow you to do more of what you enjoy in the long run, while a windfall only offers short-term enjoyment.

For more information on payday loans, contact a company like Payday Express.