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Key Points: 


  • Repaying debts requires pre-planning and budgeting, which can be made easier through using a budgeting app. 
  • Prioritize repayments based on cost of borrowing, whether they’re secured or not, and which debts are most pressing. 
  • In 2021, the average payday loan was $375, and average APR on payday loans is 396%. 
  • You could seek an ‘arrangement to pay’ if you are struggling with repayments. This is a restructuring of a repayment plan. 


The Best Ways To Repay Debts

Missing repayments can be costly. Make sure to plan repayments sensibly with the advice below.


Plan Ahead To Meet Repayments


When you take out a loan, you agree to a repayment plan. The average US borrower agrees to repay their debt two weeks later, which is usually when they receive their next paycheck. You are agreeing, not only to pay back what you borrowed, but to pay back interest and any fees too. 

For example, if you are successful in applying for a $500 loan with 400% APR and repay it within two weeks,  you will owe a total of $576.71 (the $76.71 is the APR) in repayments. 

You can use online calculators to determine how much you will owe, and you should be certain that you will be able to pay your loan back before agreeing to it. To make your payments more manageable, it may be worth considering a budget. 




Budgeting is a very manageable and useful tool, and one that smartphone apps make even easier. HoneyDue, Mint, YNAP, PocketGuard and others are easy-to-use financial products intended to track spending, spot where you could save through categorizing your spending, and even help you set up direct debits to your own savings account, meaning you save without having to remember to do it.

Buy-now-pay-later tools are also increasing in popularity and could help free up some funds for you when shopping. Many of these app offer free versions, and don’t take long to get the hang of. 

If apps aren’t your thing, you could make a simple budget through using a spreadsheet. You’ll want to log any money you have flowing in, and then note down all outgoings. You can categorize this spending yourself, labeling transactions as ‘food/drink,’ ‘travel,’ ‘shopping,’ and ‘hobbies.’ This allows you to see where you’re spending the most, and where you could afford to spend less. 


Prioritize Repayments 


You should always prioritize repayments on secured loans, which declare your assets as collateral. This is because if you fail to meet these payments, your assets could be seized. For example, if you have a title loan and fail to repay it, you will lose your vehicle.

You should also turn to repayments on loans with high interest attached before facing those with lower interest. This is because loans with higher interest are more expensive to take out, and will rack up a higher bill than those with low interest. You can roll over lower interest debts while you deal with the more expensive ones. Don’t think that rolling over debts is unlikely – 1 in 4  loans are rolled over!

Finally, you should pay off debts that are essential to living healthily. For instance, electricity bills and heating bills are central to comfortable living, so should be high on your priority list. 


Make sure you pay your debt back on time.

Make sure you pay your debt back on time.


Ask For Help If You Need it

A mere 14% of payday loan borrowers can comfortably make repayments according to the terms of their contract. Don’t think it’s rare or embarrassing to hit stumbling blocks during troubling financial times. 

If you need cash, consider the following options: 

Payday Loans 

While pricey, payday loans can provide you with much needed cash within a few hours. You should be sure that you can pay your loan back before taking it out. 

Cash Advances

These are essentially early paychecks provided by an employer. These are most common among large employers with extensive workforces. If you need cash, ask your employer what work-based support can be provided to you. 

Loan From A Loved One

These can be damaging to relationships, if you are open and honest about your circumstances, and about your repayment plan, these can be a great lifeline. This is because they are typically more flexible than your average, high-street loan. 

Arrangement To Pay

If you would rather stick to the single debt, you could ask your lender for an Arrangement to Pay, which essentially rolls your debt over. This is a restructuring of the repayment plan that you agreed to in your initial loan contract. Many, but not all lenders will be happy to discuss this  as it makes it easier for you, and makes getting their cash back simpler for them.