Payday Loans Debt Consolidation

Facts About Online Payday Loan Debt Consolidation – 5 Things To Keep In Mind

If you are struggling with the mounting amount of payday debts that you owe to different creditors, you should keep in mind that you are not the only one. As per recent reports, over 80% of payday cash advance borrowers end up getting trapped into a vicious cycle of debt. But, you do not have to lose hope, as there are plenty of ways that can help you get rid of your debt problems – the concept of online payday loan debt consolidation is one of them. There are hundreds of companies out there that provide such services. But unfortunately, not all those companies are legitimate ones. Besides that, even those that are genuine and reputable offer such a wide array of consolidation programs that it sometimes becomes very difficult for the consumers to decide which one of them is the most suitable for their specific debt and financial situation. Following is a brief rundown on some of the basic facts regarding this that you must be well aware.

Look At The Additional Services On Offer

It is very important for you to keep in mind that online payday loan debt consolidation companies also offer an array of additional debt relief services, such as credit counselling, budgeting and even legal help. You are advised to review those additional services thoroughly. Sometimes, these additional services are sufficient enough to solve your problems. For example, if your finances are messed up, a credit counsellor can guide you on how to regain control of your finances and follow a proper budget plan to ensure enough money to pay off all your payday debts. In such cases, you can solve your debt problems quite easily and affordably, without needing to go through the hassles of consolidating debts. Likewise, you may also like to consider using the ‘legal help’ services of these companies, as this way, you can find out if your lenders are violating the laws; if yes, you can take some immediate legal actions and deal with your debt problems the legal way. For example, if the company finds out that your payday lender is not even duly licensed to issue a cash advance to you, you will legally be obligated to repay only the principal amount (without any interest or finance charges).

Review The Cost Of Consolidation And Your Eventual Savings

Before you sign up with an online payday loan debt consolidation program, the most important thing that you have to do is to review the cost of consolidating your debts thoroughly in a way that should provide you a very clear and practical idea about how much amount of money you will eventually be able to save on your debts. If you find out that the company is charging you a higher amount of fee for their services but the reduction on your debts is very little, you should take it as a huge red flag. Always remember, the task of a debt consolidation company is not just limited to consolidate all your debts and allow you to make a single monthly payment while they will be disbursing the payments to your respective creditors, but they are also supposed to negotiate with your lenders and convince them to waive off penalty charges, and if possible, to reduce the interest rates and fees. So, you have to look out for a company that charges less and helps you save more on your debts. In general, you should be charged a commission, which is determined as a certain percentage of the amount of money reduced on your debts.

Read The Fine Prints Thoroughly Before You Sign It

As per the new US laws regarding online payday loan debt consolidation, it is legally mandatory for all companies to disclose all the terms and conditions of their services clearly in a written agreement. They are also required to include a ‘disclosure box’, where everything should be made completely clear without leaving a room for confusion. For example, you may find a company that claims to charge a very low amount of money, but they mention their fee with a * sign. If that is the case, this * sign must be explained in the disclosure box. Therefore, by reviewing this disclosure box, you can get the true picture about the cost of the services and other terms.

Get References From People You Trust

You are trying to get references from other people who have used online payday loan debt consolidation services in the past, you are advised to talk to the right individuals only, such as your close friends, colleagues and family members. These are the people who usually have no hidden motive and so they can be trusted for an honest recommendation. On the other hand, if you are talking to a third party who you do not trust much may refer to you a company that he or she is associated with as an affiliate. Such recommendations are made with the only motive to earn commission. So, be very careful if you follow any recommendation. It is always wise to do a thorough background check of the company on your own.

Protect Yourself From Debt Consolidation Scams

Unscrupulous lenders are always looking for their prime targets, which are people who are in a deep financial trouble and are desperately looking out for solution. If you are not careful, you can get trapped into online payday loan debt consolidation scams. Any company that is not upfront with their intentions must be avoided at all cost. Since most consolidation programs require you to make payments to these companies, which further transfer the payments to your respective lenders, it is very important for you to determine in advance that what these companies are going to do with your money. Will they honestly transfer the payments to your creditors? Do not hesitate to ask question if you have any queries or confusions. All sorts of warning signs, such as dreamy offers and flashy advertisements, must be taken up very seriously.

Overall, if you keep in mind the above things and work on your strategies accordingly, you will definitely be able to make an informed decision regarding online payday loan debt consolidation.

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