Consolidating payday loans is an effective way to get out of snowballed debts. Though it is not advised to take payday loans, people usually apply for them in cases of emergency when they are in need to quick cash to cover up an expense. Since these loans require no credit checks, people get more attracted towards this option.
Payday loans are short term loans with a high interest rate. This is usually the reason why most people get stuck in a circle of debt when they apply for payday loans and it gets increasingly difficult for them to get out of it as the debt accumulates.
There is a way out though. Consolidating payday loans is a good option to get rid of the debts. Although you will continue to pay interest but the rates will not be as high and the loan will be long term with flexible monthly plans.
Consolidating Payday Loans
It can be daunting to try consolidating payday loans but the option is worth exploring. There are basically two ways you can consolidate a payday loan.
- Consult a financing body to consolidate
- Use a debt consolidating program
Consulting a Financing Body
If your quick loan has gotten out of hand and is too large a sum to manage, then you can apply for a personal loan. Personal loans are unsecured loans so your collateral is not at risk should you obtain one. They also have lower interest rates as compared to payday loans and have a long term monthly payment plan.
You can payback the payday lender with the personal loan you took. Then you can repay the financing institution that issued you the personal loan in the form of monthly payments. These are easier to manage and stretch over a long period of time depending on the amount you borrowed.
Here are a few options to get a personal loan from:
- Home equity loan
- Borrow from a lending institution or credit union
- Borrowing from friends and family where you agree to give them back the amount in a specified time frame
Your credit history is required if you apply for a personal loan from companies such as Payday Loans Quiddi Compare.
Payday Loan Consolidation Programs
There are debt consolidation programs that help you get rid of the loan if it is too large for you to handle. They do this by working with payday loan agencies and negotiate a monthly plan for you with low interest rate so it gets easier for you to handle. Some payday lenders do not form any association with debt consolidating programs but it is worth a shot to inquire about it.
This process works by debt consolidation companies distributing your monthly payment to the creditors, and the payday lenders will apply it to your debt.
By consolidating payday loans, you do not only get out of the debt but you also save up on the high interest rates you were being charged. It enables you to avoid paying late fee and other charges that come attached with late or missed repayment of payday loans.Read More