A payday loan or a cash advance is a short-term and small-dollar loan given out to borrowers who are in need of cash for an unexpected expenditure or an emergency situation. It could also be used to cover expenses between the arrival of paychecks. Cash advances are used only for short-term loan requirements and are unsuitable for long-term requirements. Payday loans can come with high-interest rates and if taken repeatedly can trap the borrower in debts.

Negotiate with the lender: Negotiate with your lender to see if they can put you in some hardship program that will enable you to pay your loans with lower interest rates. Although payday lenders look forward to making as much money as possible through giving out these loans, they may be ready to negotiate with borrowers who show sincerity in paying back the loans.

Wait for your cash advance to go into collections: Alternatively, you can wait until your cash advances go into collections. If you have failed to meet the deadlines, then your payday lender may go to the extent of harassing or threatening you. If you continue to delay the payment, your cash advance will be redirected to a collection agency. Once this occurs, you can pass your account in the collection into a debt management program that will give you a more reasonable payment as well as payoff time.

Settle your debt: As a final resort, you can approach a debt settlement company to work on a settlement or even file for bankruptcy. You will need the assistance of a bankruptcy attorney or a debt professional to work out the settlement.

The consequences of non-repayment of payday loans or cash advances can take a big hit on your credit score. It is therefore advisable that you refrain from getting a payday loan as much as possible. If you are considering a payday loan, weigh the risks and your ability to afford the interest rates.