Payday advances are loans taken against a person’s paycheck. They have a way of digging into your paycheck month after month. They usually have exorbitant interest rates, though the sites offering the services claim otherwise. When it comes to getting out of payday loans many questions, like “Is there something that can be done to consolidate payday advances?”, “Can I consolidate payday loans?” crop up in the mind of an average individual.
What is Payday Loan Consolidation?
To consolidate a payday loan, approach a finance company that offers the service. Theoretically, the consolidator buys the loans from the debtor at a discounted rate. It actually saves the debtor from debt collecting agents. The consolidator actually sets out a plan for the debtor, based on which he or she will be in a position to pay off all the debt.
Is Consolidation Another Loan?
Yes, it is. Don’t get put off by that fact. It is a single loan that is taken to pay off many payday loans that are burning big holes in your pocket. The interest rate on the loan is lower than that on instant payday loans and the loan is sometimes extended like any other loan over a period of 12 months or less.
Consolidation Saves the Day
Your payday loan is cutting your paycheck into a quarter every month. You are tempted to take payday loans to cover your other payday loans. It is a vicious cycle that pulls the debtor deeper into debt. The saving grace in such situations is to consolidate payday loans. The consolidation company, also known as the debt reduction agent, contacts the payday loan company and strikes a deal with it to reduce the loan amount. Once this is done, you don’t need to contact the loan company directly. The consolidator will do all the correspondence and act as liaison between the debtor and the creditor. The best deal for settling the debt is arrived at and the customer’s best interest is upheld. Consolidation helps reduce the burden of debts by as much as 50 percent in some situations.
First of all, try and stay away from the trap of payday loans. However, if you are caught and see no way out, think about consolidating all the loans and paying them off as one. It may be the only key to freedom. By consolidating payday advances, the debtor is freed from the burden of payday loans. Beware, payday loans have a tendency to pile up and lead a person to bankruptcy.