If you're stuck in payday loan debt and are looking for a way out of the problem, you may consider payday loan debt consolidation. This is where you negotiate for lower rates on your debt and consolidate multiple bills into a single monthly payment. Consolidation helps you out of payday loan trap so that you can have better control of your money. If you want to know what payday loan consolidation is all about, glance through the topics given below:
What are the types of payday loan debt consolidation?
There are 2 types of payday loan debt consolidation. Here's a brief idea on each type.
- Payday loan consolidation program: This is similar to a debt consolidation program. Here, payday loan consolidation companies work with your lenders in order to reduce interest rates on your payday loans thereby making your payments affordable. If you have missed payments, the dues are either reduced or eliminated in order to minimize your monthly payments.
The consolidation program is such that payday loan debt consolidation companies accept a single monthly payment from you and disburses the funds to your payday lenders. This is how you consolidate payday loans and replace multiple bills with one monthly payment.
- Consolidation loan: It works like a debt consolidation loan with which you can pay off multiple payday loans. After you do so, you need to pay off the consolidation loan in monthly installments. But the loan term being longer, the total interest payable over the term adds up to quite a big amount.
Since you're paying much more in total interest and the term is quite long, a payday loan consolidation program is a much better option compared to taking out payday loan consolidation loans.
What are the advantages of payday loan consolidation?
When you go for payday loan debt consolidation assistance, you get the following benefits.
- Reduced rates on your payday loans.
- Your monthly payments are affordable.
- You make a single payment each month.
- Late fees and over limit charges are reduced or waived off.
- You can avoid creditor or collection calls.
- Paid off accounts have a positive impact on your credit.
- Don't have to manage individual creditors and different payments.
- Budgeting becomes simpler as there is one fixed monthly payment.
Payday loan consolidation offers a manageable way out of your payday loan debt problems. It relieves stress and gives you peace of mind when everything seems helpless.
"Last updated on May 25, 2013"