Payday Loans Debt Consolidation

Signing Up For A Debt Consolidation Payday Loan Service? Do Not Pay The Fee Until Your Debts Settle

Beware of those companies that charge you upfront for their debt consolidation payday loan service. Most of them are not legitimate ones. And, even if they are genuine, they are probably more interest in making a profit from your situation, not in helping you get rid of your debt troubles. No matter how small the fee is, you are advised not to pay even a single penny to the debt consolidator until they do what they promise. Make sure that the agreement you are signing includes the provisions accordingly. Following are some of the important points that you must keep in mind in this regard.

Debt Consolidation Laws

Before you sign up for a specific debt consolidation payday loan service, you must first get yourself educated about the laws imposed by your state to regulate such services. There have been hundreds of instances where consumers get trapped into a much deeper debt problem when they try to consolidate debt with the help of a third-party agency; obviously this usually happens when the company is an unscrupulous one. As per the laws in most states, it is legally mandatory for payday debt consolidators to specify all the terms and conditions clearly in the agreement. There must not be any hidden clauses. They must explain the exact amount of fee that the borrower has to pay and what modes of payment are acceptable. Most importantly, the laws prohibit these companies to charge anything in advance.

Is The Concept Of Debt Consolidation Bad?

No, the concept itself is just wonderful. But, you need to have the right approach towards the same, a well-informed approach. You have to be very careful while you are choosing a debt consolidation payday loan service. The basic concept of this method is to convert all your debts into a single debt account, at least virtually. This way, it becomes easy to manage your debts and pay them off. You can even do it on your own, such as by borrowing a new, big loan that should cover all your debts. Pay all your debts using the money thus received and thus you will end up having just one loan account instead of so many payday loan accounts. Besides that, if this new loan is a conventional loan, the interest rate will also be almost negligible as compared to the ‘monster’ rate of interest that is charged on payday loans. What is more, conventional loans also allow you to make the repayment in easy monthly installments. However, if you cannot qualify for a bigger loan due to some reason, there is nothing wrong in signing up with a debt consolidator. Just make sure that the company you are choosing follows the laws thoroughly.

Overall, when you sign up for a debt consolidation payday loan service, the company must first settle your debts as promised and then should charge their fee in the end. No matter how small the fee is, do not pay it in advance.

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