Payday Loan Consolidation Tips
The high-interest rates and fees that payday loans carry trap many consumers in a cycle of debt. This is especially true if the borrower isn’t able to repay the loan at the end of its term. Resource: https://www.nationalpaydayrelief.com/payday-loan-consolidation/
A debt consolidation company can help you escape this cycle by combining all of your payday loan payments into one single monthly payment that you can afford to make. They also can negotiate with your lenders for reduced interest rates, waived charges or extended payback terms.
The Do’s and Don’ts of Payday Loan Consolidation
Most payday loan providers charge a variety of fees that can quickly add up to thousands of dollars over the course of a year, making it difficult to meet your repayment obligations. A good credit consolidator will eliminate these fees from your new monthly payments, leaving you with a much more affordable budget and a debt-free future.
Improved Credit Score
Whether you choose to pay off your payday loans using a debt management plan, a debt consolidation loan or Chapter 7 bankruptcy, a consolidation process will have a positive effect on your credit score. This is because consolidation loans typically have a significantly lower annual percentage rate (APR) than payday loans, which will make them easier for you to manage and keep your balances low.
You may be tempted to take out another payday loan once you’ve paid off your current debt with a debt consolidation company, but it’s important to have a budget that you can afford to follow. This will ensure that you don’t get into a new cycle of debt, and that you can always have an emergency fund to draw on in case your income is interrupted.