Should I take out a payday loan to pay off another payday loan?

Should I take out a payday loan to pay off another payday loan?

Payday loans can be great for financial emergencies when you’re strapped for cash. But understanding what an emergency is and when to say no to an easy alternative are two different things. Even though taking out a payday loan can be beneficial for short-term situations, it can be easy to rely on those loans and get dragged into a debt trap.

However, with all this being said, you can take several approached to get rid of payday loan debt. We’ll detail these strategies below and discuss ways to prevent the problem of paying off payday loans by taking out another payday loan.

Get a different loan

If you are not able to pay off the loan at this time, a different loan can make it easier to get out of debt. Here are a couple of options to consider:

Consolidate debt: Instead of renewing existing payday loans, consolidate those loans with a more affordable loan, and then start paying off the consolidation loan. Borrow just enough to pay off your existing debt (and maybe enough to keep you from getting another payday loan)—and nothing more.

Ask your friends and family: If you can’t get approved, consider asking somebody that you’re close to if they can lend you some cash. This person will essentially agree with you the terms of borrowing their money. They could loan it to you or they could be so kind as to give it to you without any repayment terms.

Extended repayment

When times get tough and you are unable to repay payday loans, contact your lender and ask about your options. Some lenders offer extended payment plans and other forms of short-term relief.

Make some cash

Sometimes finding more cash in the budget is your only option. There are two ways to do that: Earn more income, or cut expenses. Neither is easy, but they’re both very effective.

Increase income: If at all possible, find extra work. You don’t need a permanent job—you just need to hustle short-term to get out of any existing payday loan debt.

Sell stuff: You can also bring in cash by selling possessions. If working more is not an option, this might be your next best option for raising cash quickly

Cut costs: If bringing in cash isn’t an option, you’ll have to reduce spending until you’re back on top of your finances.

Set yourself up for the future

Once you’re on your feet, you’ll want to avoid going back to payday loans. You can do that by building a strong financial foundation.

Emergency fund: Set up an emergency fund so you have cash on hand when you need it. Start by setting aside a few hundred pounds, and then build it up to one thousand. Eventually, you should have three to nine months’ worth of living expenses in cash, which should cover most of life’s surprises. But start small now and work your way up.

Build your credit: To get affordable loans in the future, you need good credit. If your credit is poor or you don’t have any credit history, establish your credit over time.


If you’re deep in payday loan debt, speak to a debt advice service like Money Advice Service, free of charge. They can help you dig into the details of your budget and potentially work with you to find a way out.