A payday loan can be a real life saver when your monthly budget is hit by an uninformed roof leak or medical emergency. There is ready money available to type you into the immediate financial crisis. It’s a high interest loan, but okay, as long as things are taken care of until your next paycheck arrives!
The deadline for repayment is generally when your next paycheck is due. If you can’t afford it, it’s carried over.
The problem with payday loans is that it can be a cruel cycle. Before you realize that you have signed up for multiple loans, it makes it very difficult for you to keep up with the timely payments and fees. The ease with which you can get one is partly to blame.
How do you repay these loans?
Payday loan consolidation is the solution for individuals who have accumulated huge debts. However you must first understand how it works.
The advisor will first assess your financial situation. This includes validating loans and making sure those are still active. The company pays your outstanding debts; so all your loans are unified against new conditions. You are then only responsible for one credit agency.
A high interest rate is a distinctive feature of this type of loan. A company that is aiming for consolidation will first look for ways to reduce the interest rate against which the amount lent to you; this will make your loan easier to repay. It can also help you waive additional costs and fees. To add, they give you enough time to repay your loan. So, with a lower rate and more time to pay, your monthly fees will be smaller.
Also in payday loan consolidation, you have two options:
· Secured loan consolidation includes securing loans against any valuable property like your house or car etc. The interest rate is low; however, in case of failure to repay, you will lose the property held as collateral security.
· Unsecured loan consolidation offered without requirement of additional security. The interest rate is slightly higher than the first choice but lower than that required by lenders on payday. It is a great option for one with a good credit score.
You can consolidate the loans yourself or receive payday loan debt from companies that offer such services. If you choose the latter, they will handle everything for you, from handling communication with your lenders to paying off your loans.
The fund is a payday loan company and does not offset your debts. They work with you and your lender to create a cheap payment plan.
Now if you want to get the best compromise soon, you need to choose your payday loan company. You need to make sure the company is registered. This step helps ensure that the financial institution is genuine. Be clear about the fees you pay for the settlement. Payday loan consolidation should be based on your financial situation. The company does not have to operate with a one-size-fits-all approach. If they force you to accept the terms, avoid the company and look for another one. If the company tries to sell you things other than payday loans, it’s a red flag.
So, if you are in debt and unable to repay the loans, don’t bother with the phone calls and repayment agents. Schedule a free counseling session with a payday loan company and stop your stress.