A payday loan can be a real life saver when your monthly budget suffers an ill-conceived ceiling leak or medical emergency. There is ready money available to guide you through the current financial crisis. It’s a high-interest loan, but okay, as long as things are taken care of until your next paycheck arrives!
The payment deadline is usually when your next paycheck is due. If you are unable to pay it, it is carried over.
The problem with payday loans is that they can be a vicious cycle. Before you know it you’ve signed up for multiple loans, making it difficult to keep up with timely payments and fees. The ease with which you can get one is partly to blame.
How do you pay off these loans?
Payday loan consolidation is the solution for individuals who have accumulated huge debts. However, first you need to understand how it works.
The advisor will first assess your financial situation. This includes endorsing loans and making sure any are still valid. The company pays off your outstanding debts; So all your loans are converted into a loan on new terms. You are then only responsible to one credit agency.
A high interest rate is a distinctive feature of this type of loan. The company working towards consolidation will first look for ways to reduce the rate of interest that is matched by the amount lent to you; Thus, paying off your loan is easier. It can also help you forgo fees and surcharges. To add, it gives you enough time to pay off your loan. So, with a lower rate and more time to pay, your monthly payments will be smaller.
In your payday loan consolidation also you have two options:
Secured loan consolidation involves securing loans against some valuable property such as your home, car, etc. The interest rate is low. However, in the event of non-payment, the property held as collateral will be forfeited.
Unsecured loan consolidation which is provided without the need for collateral. The interest rate is slightly higher than the first option but lower than the rate charged by payday loan lenders. It is a great choice for someone with a good credit score.
You can consolidate loans on your own or get payday debt assistance from companies that provide such services. If you choose the latter option, they will handle everything for you directly from handling communication with your lenders to paying off your loans.
The bottom line is that a payday loan consolidation company does not write off your debt. They work with you and your lender to create an affordable payment plan.
Now if you want to get the best settlement soon then you need to choose your payday loan consolidation company carefully. You need to make sure that the company is registered. This step helps ensure the credibility of the financial institution. Be clear about the fees you pay for the settlement. Your payday loan consolidation should depend on your financial situation. A company should not operate with a one-size-fits-all approach. If they force you to accept the applicable terms and conditions, avoid the company and find another. If the company is trying to sell you things other than payday loan consolidation services, that is a warning sign.
Therefore, if you have accumulated debts and are unable to repay the loans, do not get caught up in the phone calls and repayment agents. Schedule a free consultation session with a payday loan consolidation company and end your stress.