Payday Loans Debt Consolidation

3 Most Common Options For Pay Day Consolidation

If you want to manage and pay off your payday loan debts easily, you may like to consider the method of pay day consolidation. This method allows you to convert your multiple cash advance accounts into one big loan. This makes the debt management very for you, as there is just one account that you have to handle. Furthermore, this new loan account does not charge you a significantly very low rate of interest as compared to the extremely high rate the payday loans were charging. Besides that, this new account also provides you the convenience to pay back your debts in easy monthly installments over a certain period of time. This way, even the repayment of the debt becomes much more affordable. If you use this method wisely, you can easily achieve a debt free life within a very short period of time. Following is a brief rundown on three most common options that are available to you in this regard.

Secured Debt Consolidation Loan

A secured pay day consolidation loan, as the term suggests, requires you to put something as collateral against the money borrow as part of the new loan. In general, it is a home equity loan, which means this option is applicable to only those borrowers who have some equity in their home. You can easily qualify for a home equity loan at a very low rate. Once you get the money, you can pay off all your existing payday debts. This way, you will have now just one loan account to handle, which also allows you an array of conveniences making the repayment very easy for you.

Transferring Debts To A Credit Card Account

Another effective method of pay day consolidation is to transfer all your payday debts into a credit card. But, this option is going to work for you only if you have a credit card with 0% introductory offer and with no annual fees. It is true that even credit cards do charge a very high rate of interest, but if you compare the rates with the interest charged on payday loans, you will find that credit cards charge comparatively very low rate. Here again, you will eventually be able to have just one account, which will require you to make just a single monthly payment, that too, at a much lower rate.

Unsecured Personal Loan

If you do not have a home or do not want to take the risk associated with a home equity loan, you can still use the concept of pay day consolidation by taking an unsecured personal loan. As compared to the secured consolidation loan, an unsecured personal loan will cost you a little higher amount of money in the form of interest and other finance charges. But, the good news is that there are lesser risks associated with this option.

It is very important for you to keep in mind that all of the above three options are going to work for you only if you do not make further defaults on the new loans you borrow. Making further defaults will make things more complicated for you. Overall, if you follow the right approach and demonstrate good financial discipline, it should not be very difficult to use the method of pay day consolidation to manage and pay off your mounting payday loan debts.

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