Like most people we’re all feeling the effects of the economy – with the loss of jobs, companies that were supposed to be invincible have even gone out of business.

Not to mention the looming fiscal cliff which happens at the end of this year – and if we go off that cliff it results in a 2% tax increase for all workers.

So it always seems like there are financial challenges dropped if front of everyone all the time. So it’s easy to understand why so many people turn to payday loans.

More and more people face more month at the end of the money and are having a very hard time meeting their monthly financial obligations – so why not get a payday loan? It solves the immediate problem.

Yep it does solve the immediate problem but unfortunately it creates a whole new set of financial problems. When you take out these payday loans they have to be paid back and usually within two weeks.

And with the crazy high interest rates and the fact that people using payday loans are short with money to begin with, paying these loans back becomes nearly impossible so they end up in a payday loan cycle.

And that cycle is one of two things or even both. The first cycle is getting another loan from another lender and use that new loan to pay off the first loan and they keep repeating this cycle hoping to catch up one day.

Second, they pay a fee to have the loan extended for another few weeks again hoping they can catch up and pay off the loan then. And when they can’t they pay another extension fee.

And when this option runs out (some lenders can only extend a loan so many times) they get caught in the first trap of taking other loans out to pay other loans.

Once caught in the payday loan trap most people think they have no way. Some people simply default on the payments and when they do that it opens a whole new can of worms. And then others even go to the extreme of filing for bankruptcy.

But it does not have to be that way – people can end payday loan debt by using a program called a Payday Loan Debt Consolidation Program.

Unlike a traditional consolidation loan where you need collateral and good credit, with a consolidation program the borrower does not have to have collateral to support the loan nor does the borrows credit play any role in qualifying for the program.

In a nut shell the program works like this;

First the consolidation company takes over the loan. This way the lenders have to deal with the consolidation company not you.

They then negotiate with all your lenders and create a new and affordable re-payment plan that fits within your budget and this re-payment plan is set over 6, 12 or 18 months – it just depends on your situation.

This also stops all the fees and interest on your loans as well as stops any harassing phone calls you may have been getting.

Now you simply pay the consolidation company each month and they in turn pay all your lenders. Yes payday loans do serve a purpose but you must be careful not to be blinded by what seems like a simple solution to a financial problem or emergency.

There is a way out and its not by default, nor bankruptcy – it’s by using a legitimate Payday Loan Debt Consolidation Program.