Payday Loans Debt Consolidation

How To Find Debt Consolidation And Management Programs For Payday Loans?

It is not without reasons why payday loans are also knows as predatory lending programs. Even Federal Trade Commission has warned consumers of the United States of America against such lending practices. Sixteen states have already either banned all types of payday loans or have imposed very low rate restrictions on such lenders. But, despite all these facts, since payday lending is still legal in many states and there has been aggressive, positive marketing about such loans, thousands of consumers are still getting trapped in the vicious cycle of debts. The only relief is that there are many debt consolidation and management companies in the market that offer a wide array of debt help programs for payday loan debtors.

How Do Consumers Get Trapped Into A Vicious Cycle Of Payday Debts?

The target consumers for these loans are those who have very limited monthly income, which is often not sufficient enough to meet all their financial obligations. It means they almost always need some financial help. Since payday loans are easy to borrow, they get tempted to borrow these loans, but since they feel to meet their financial obligations, they keep on borrowing new payday cash advances even if they already owe multiple payday loans to the same or different payday loan companies. Since interest rates, penalty charges ad other fees are very high on these loans and the cost multiplies itself faster than borrowers’ imagination, the debt situation often becomes out of control within just a few months. In such situations, debt consolidation and management programs for payday loans can prove to be a great help for the borrowers.

Isn’t Bankruptcy An Easier And Safer Solution Than Consolidation Programs?

The provisions for bankruptcy have been made for those consumers who have gathered so much debts that it has become impossible for them to repay the same with the kind of income they have. But, it is very important for you to understand that bankruptcy laws require debtors to meet certain qualifying criteria. For example, you must first go through financial counseling under the supervision of a government-certified credit counselor. The counselor does a thorough review of your finances and if

he or she is convinced that bankruptcy is the best solution for you, only then you can go ahead and file for bankruptcy.

But, even if you qualify for bankruptcy filing, you are still advised not to go for it. It is true that most of your debts get discharged under bankruptcy but the process also eats out most of your assets and properties. Besides that, the bankruptcy records stay on your credit report for a period of seven to ten years. In short, getting bankrupt means you will have to start your financial life again from zero. This is a very horrible situation. On the other hand, debt consolidation and management programs for payday loans may not eliminate all your payday debts, but they will also not take away your assets or properties. In most cases, when you participate in such programs, you get a chance to repay your debts on much easier and more affordable terms. A large part of your debts that constitute interest and penalty charges is often written off by your lenders. Besides that, the process does not leave any negative impact on your credit report.

So, overall, debt consolidation and management programs for payday loans are undoubtedly a much safer and cheaper solution than bankruptcy.

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