Paying back loans with other loans?

When you are borrowing money from multiple sources and getting short term as well as long term loans then you can get into a situation where you can’t pay back all of those monthly payments as well as completely repay those short term loans. These situations are rear but they do happen and because borrowing money is so easy people sometimes take on too much debt without thinking about how they will manage to repay all that money. And in these situations you will have just a couple of option to do where one of them is to declare bankruptcy the other is to sell the things that you bought with those loans and the third is to buy yourself time with getting more loans. This last option may sound ridiculous at first and I have to admit that it is a bit risky but if you do it properly then you can extend your repayment schedule without paying penalty interest payments.

The best place to use other loans to pay back your first loans is in the short term online loan segment where you need to pay back the money that you borrowed in one big payment not just divide that money into smaller monthly payments. If you borrow money for 30 days and don’t have the cash to repay that debt when the repayment date comes then you can take out another online loan and pay back the first one and with that process give yourself more time to find the money to completely repay your debt. This process works best if you can get those interest free loans and because short term lenders are constantly competing with each other you can get those interest free loans from each lender. This way you can create a debt chain where you borrow money from the next lender and pay back the first one multiple times till you manage to find the money to once and for all repay that debt. But you have to be careful with this scheme because if you get rejected for the second loan or don’t get that interest free first loan then you will have to pay a late payment penalty and that can lead to larger and larger total loan amount.

And another thing that you need to know is that you should never borrow money to pay a monthly payment on a long term loan. If you take out a short term loan to cover a monthly payment then in the next month you will have to pay double and it is very unlikely that you will be able to do that if you had to take out a loan to pay your monthly payments in the first place.

So be careful and use this method only if it is you last choice and you don’t have any other options to use!