Posts Tagged ‘Debt consolidation with payday loans’

Debt Consolidation With Payday Loans – Bid Farewell To The Risky Payday Debts

Debt consolidation with payday loans is possible. In fact, of late, it has emerged as one of the most effective and result-oriented ways to deal with risky payday debts. It is not without reasons why payday loans are also termed as predatory loans by most financial experts. In fact, this is because of the predatory nature of these lending programs why the majority of the states in the United States of America have started enacting several laws to restrict these types of lending practices. Short-term cash advances are very easy to qualify for. And, the most attractive thing about it is that it provides instant cash for the borrower, within a matter of just a few hours. But, the loan terms are quite expensive and quite damaging to one’s finances. The interest is extremely high, usually a 3-digit APR, which can go as high as 600% per annum or even more. Besides that, the provision of automatic rollover of the loan on repayment failure is another big factor that traps the borrower into a viscous cycle of debt. If you are also struggling with payday debts, the first thing that you have to do is to realize that you made the worst financial mistake one can ever make. Once you do that and make a commitment to yourself that you will never fall for these lucrative yet highly risky loans ever again, you can follow the steps mentioned below to get out of the otherwise impossible-looking payday debts.

Get A Clear Picture Of Your Actual Debt Situation

Before you start working on your strategies for debt consolidation with payday loans, you must first do some basic homework and get a clear picture of your current debt and financial situation. Write down all the details on a notepad, such as the amount of debt that is currently outstanding on different payday loan account that you have in your name, the rate of interest that is being charged on them, and any special remarks about those accounts, such as any specific provision that a particular lender follows. Looking at the overwhelming amount of debt that you owe to various payday loan lenders can be quite a stressful task, but this step is an important one. It will be better if you also write down the details of your regular sources of income on paper along with other important financial information, such as the details about other priority bills (mortgage, car loan, and insurance premium payments).

Contact A Debt Consolidation Agency

There are many agencies out there in the market that offer specialized services for debt consolidation with payday loans. However, it is very important for you to keep in mind that not all of them are genuine and legitimate ones. Therefore, you must do a thorough research and comparison-shopping before you finally decide to sign up with a specific payday loan debt consolidation agency. You can check their past history by accessing their records with the Better business Bureau or by contacting the FTC (Federal Trade Commission). Once you select a reputable agency, you can schedule an appointment with them. Do not forget to bring all those details that you prepared in the first step. All those written details will help the agency to get a clear picture about your specific case. The more accurate detail you provide to them, the better suggestions you will be able to get.

Choose The Right Program

The agency will appoint a credit counselor to study your specific case. The counselor will look into your debts and other financial matters and then submit a report to the agency. The agency will them suggest you an array of options that might be suitable to your specific situation. Some of the common options for debt consolidation with payday loans include a debt consolidation loan, a debt consolidation program, and debt settlement. Debt settlement is an option that is applicable in extreme situations, such as where the borrower is going through a severe financial hardship (has lost his or her job and is medically not fit enough to get another job for a long time). In such cases, the agency will try to convince the lenders to accept a reduced amount of money in full and final settlement of your entire debt. If they succeed, you may get a chance to pay off all your debts by paying just 30-70% of the entire outstanding debt, that too, in several small monthly installments. If you choose to obtain debt consolidation loan, you will have to obtain a new conventional loan with a big amount so that you can pay off all your existing debts with the money thus received. This way, you will end up having just one loan account, where the terms of the repayment will be much easier and quite affordable (such as, low interest rate and the opportunity to pay back in small monthly installments). A debt consolidation program however works differently form a debt consolidation loan. When you sign up for a consolidation program, the agency works as a mediator between you and your payday loan lenders. You make one consolidated monthly payment to the agency, and the agency then further disburses the payments to respective creditors. The agency will convince the lenders to waive off hefty penalty charges, reduce the interest rates, and make the repayment terms a little more favorable to you. Besides that, since they are dealing with your creditors on your behalf, you will no more receive any harassing collection calls.

Overall, as we can see, debt consolidation with payday loans can prove to be a great way to deal with your payday debt problems; it is just that you will have to be very careful with your selection of the right agency and the right program.


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