Payday Loans Debt Consolidation

Do The Services Offered By Payday Loan Debt Consolidation Companies Really Work?

Sometimes, it does; sometimes, it doesn’t. There are hundreds of payday loan debt consolidation companies available out there, but not all of them are genuine ones. Even if you manage to find a reputable company, there may not necessarily be programs that are suitable for your specific debt problems. There are several factors that you must take into your careful consideration in this regard. It is generally a two-step process – the first task is to do a thorough research and find out some good companies; the second task is to find out whether you qualify for a suitable program or not. In brief, you have to be very careful with your choice. Make sure that your decision to work with such companies is based on facts, not on half-baked information. Besides that, since you are deeply drowned in debt and are looking out for a way to come out of it, you will find every debt relief offer quite tempting, but your decision must not be based on just temptations.

Debt Consolidation For Payday Loans Have Now Become A Highly Competitive Market

It is not without reasons why so many payday loan debt consolidation companies are opening their businesses every next day. As per a latest report, there are over 13 million searches daily on Internet for payday loan providers. Because of the aggressive marketing that payday lenders do, more and more consumers are getting trapped into this form of predatory lending. As a result, the number of consumers who are seeking debt relief from these types of loans is also increasing at a very fast pace. This is mainly because of such a huge base of target customers why many debt consolidation companies are now offering specific services to help consumers with payday debt. At present, the market is not only highly competitive, but is also affected badly because of the presence of many unscrupulous companies who are only after your money.

Check The BBB Rating Of The Company

You can start your research by contacting the Better business Bureau and checking the BBB rating of the payday loan debt consolidation companies you are considering working with. The Better Business Bureau maintains past records of various types of businesses, including the ones that offer debt consolidation services for payday loans. If there have been consumer complaints against a specific company, you can find the details in the BBB records.

Find Out How Opting For A Certain Program Will Affect Your Credit Rating

When you try to pay off payday loan debts using consolidation programs, it may affect your credit rating positively or negatively. Negative impact is more likely because when debts are paid off using such programs, the creditors report to the credit bureaus about those debt accounts as
”paid in settlement” or “paid as per a new repayment plan”. These entries on your reports will reduce your overall credit rating. The only way to avoid this from happening is to choose a company that can convince your creditors to report the credit bureaus about your debt accounts as “paid IN FULL”. With that kind of entry on your report, you will actually see a significant boost in your credit score.

Is The Company Charging Reasonably For Their Services

Payday loan debt consolidation companies, even the non-profit ones, charge a certain amount of money as their fee for the services they provide to you. In most cases, it is a certain percentage of the total outstanding debt that you owe to your creditors. You will have to review the provisions regarding the fee very carefully in order to make sure if it is reasonable enough. Many companies keep the first couple of payments as their fee and they start sending the payments to your creditors only after they have collected their full fees. Therefore, you are strongly recommended to read the fine prints thoroughly. If you find such a clause, either get it removed or find another company that do not bind you for any such thing. After all, you are considering using their services because you think it will help you pay off your debts faster. A company that shows more interest in collecting their fees and does not care much about timely payments to your payday creditors is obviously not trustworthy at all.

Before You Sign Up, Find Out If Your Lenders Are Ready To Work With A Debt Consolidation Company

Most traditional lenders usually have no objection in working with debt consolidation agencies, especially if that helps them get their money back from the borrowers who are otherwise unable to make the repayment. But it has been found that most payday lenders do not want to work with payday loan debt consolidation companies (unless those companies are directly or indirectly associates to their businesses). This is mainly because most of these lenders are involved in unfair practices; many practices are even illegal. They fear that working with expert professionals can put them into legal troubles. Therefore, before you sign up for a consolidation program, you must first contact your lenders and find out if they are willing to work for any such arrangement.

Your awareness regarding the payday loan laws is also crucial when it comes to making an informed decision whether or not you should get help from payday loan debt consolidation companies. Many states already have laws that make it mandatory for payday lenders to offer an affordable repayment plan in small monthly installments (without additional charges) to those borrowers who are having difficulty in making full repayment of their payday debt in one go. The more you are aware about your legal rights, the better you will be able to protect yourself from fraud and scams.

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