Payday Loans Debt Consolidation

Different Types Of Programs Offered By Payday Loan Debt Consolidators

Payday loan debt consolidators offer a wide range of debt relief programs for those consumers who are trapped into a vicious cycle of payday debt. In general, the programs can be broadly divided into two categories – secured and unsecured. But, before you finally decide to sign up with such a program, you are strongly recommended to do a thorough review of the alternatives available to you. A consolidator talks to your lenders on your behalf and tries to make the terms more favorable for you. You may like to consider doing it on your own. You can save the service fee charged by these consolidators if you are confident of your negotiation skills. Alternatively, sometimes, working with a credit counseling agency may prove to be a more effective and affordable option. Following is a brief review on how the consolidation programs work under the two categories.

The Basics

It is important for you to keep in mind that the basics remain the same in both types of programs that payday loan debt consolidators usually offer. In either case, the consolidator will work as a mediator between you and your lenders. As part of the process, you will be required to make a single consolidated monthly payment to the consolidator who will further transfer the payments to your respective creditors.

But, before you start making the payments, a series of negotiations takes place between the agency and your lenders. The consolidation agency convinces your lenders to reduce interest rates and waive off penalty charges and also to make the terms more favorable. Because of these negotiations, your overall debt balance is reduced significantly to a much lower amount of money. The agency also makes sure that provisions like rollovers and other such things are also stopped so that a brake can be imposed on the cycle of debts. The debts thus eventually become easily manageable and affordable. Once everything is settled, you get a better opportunity to work on to improve your financial condition. Depending upon the specific plan you sign up for, the payday loan debt consolidators may also help you establish a budgeting plan so that you can avoid further debt problems.

Different Between Secured And Unsecured Programs

There are a few major differences between a secured and unsecured debt consolidation loan programs for payday debts. For example, in order to qualify for a secured plan, you will be required to put a property as collateral, such as your home. The benefit of this option is that you can easily qualify for a low-rate loan. It means the interest that you will be paying on the overall debt under the consolidation plan will be significantly very low. The reason behind this low rate is that the payday loan debt consolidators have to cover no risk at all. If you fail to make the repayment in a timely manner, they will sell off your home and recover their money. It means it is you who will have to take some risk if you choose to go for this option. You are advised to go for it only if you are confident that you can afford the repayment. If you are confident about it, you should consider signing up for an unsecured debt consolidation program that does not require you to put any collateral. There will be no risk at all, but the rate of interest here will be a little higher. For example, if the rate charged on a secured plan is 12% pa, you may be charged 24% of APR on an unsecured plan.

Overall, a thorough review of the options available to you is very important when it comes to signing up for the debt relief services offered by payday loan debt consolidators.


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Posted in Payday Debt Services, Payday Loans Debt Consolidation | 1 Comment »

One Response to “Different Types Of Programs Offered By Payday Loan Debt Consolidators”

  1. John says:

    Pay day loans becomes a big difficulty for a person who does not think properly about the pros and cons of such loans and tale multiple loans, after some time it becomes impossible to repay all the loans due to its very high interest rate. Debt Consolidation is the best option to get rid off such a big heap of loans, if you have some good negotiation skills in you and you think that you can get a good deal by yourself then you talk to creditors on your own otherwise you can take the help of a company which can provide you an accurate debt consolidation program of your choice. Company must have a good reputation and experience in this filed, then you can rely on it that the company will not give you any trouble. The company will play the role of a mediator and the professionals will try to settle the best consolidation program for you, they will ask your creditors to waive off the penalty charges and reduce the interest rate so that program may prove to b the most beneficial for you. Now your life can become very easy because you have to do a single monthly payment and rest of the work will be done by the consolidation company they will disperse the money to the different creditors.

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