Payday Loan Consolidation ? Is it Right for You?

Written by admin on April 4th, 2011

Payday loans are a great convenience for many consumers caught in a negative cash flow situation. Payday loans are fast, simple and effortless, and they do not require a credit check, thereby making them a sensible solution for many Americans who have poor credit.

Do You Need Assistance Before Your Next Paycheck?

If your bills and living expenses are due, and you don’t have the money to cover them before your next paycheck, you may consider applying for a payday loan to bridge the financial gap until your next paycheck arrives. From car repairs and medical expenses to rent and grocery bills, payday loans are the answer to many Americans cash flow problems.

Can You Repay the Loan?

As with any other type of loan, however, there are certain consumers that may find it difficult to repay a payday loan, particularly when he or she has taken out numerous payday loans. In these instances, the borrower may be in a situation where they simply can’t handle the payday loan debt and the fees and interest that have mounted.

Payday loan consolidation programs may help consumers caught in a difficult payday loan debt cycle, as they enable them to consolidate all existing debt into one, easy-to-manage loan with a reasonable interest rate.

How Payday Loan Consolidation Can Help

Generally, payday loan consolidation companies help consumers by contacting the payday loan companies through which the borrower has outstanding loans and negotiating with the payday loan companies to reduce interest rates and make the payments more affordable. Theses debt consolidation companies can also negotiate to eliminate or reduce fees associated with payday loans, thereby also reducing the overall debt owed to the payday lender.

Many debt consolidation companies enable borrowers to roll their existing payday loans debt into one manageable loan, thereby eliminating the stress and inconvenience of several loans.

Most payday consolidation loans are repaid on a monthly basis, and the loan term will likely be much longer than traditional payday loans. This may mean that the borrower will end up paying much more in interest. However, for many consumers caught in the vicious cycle of payday loan debt, this may make much more sense.

Benefits of Payday Loan Consolidation

There are several advantages stemming from payday loan consolidation programs:

Affordable payment plans – Because the loan is extended over a longer period of time, the payments are generally much more reasonable than traditional payday loans. Monthly payment plans – One payday loan bill per month means the consumer will be able to better manage the debt and repay it. Late fees and related charges are eliminated – Because payday loan consolidation programs pay off the existing payday loans, the mounting late fees and charges are eliminated. Numerous payday loans are rolled into one manageable loan – The need to juggle several different loans is eliminated by rolling existing payday loans into one payday loan consolidation program. Collection and creditor calls are eliminated – Because the payday loans are paid off, creditors stop calling and your life becomes less stressful once again. Peace of mind – Payday loan consolidation programs provide peace of mind to the borrowers who use them, as the nagging idea of past-due debt is eliminated.

If you find yourself overwhelmed with paying back your payday loan, a consolidation service may help you minimize your expenses and stress.

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