Posts Tagged ‘services offered by payay debt consolidation companies’

What Kind Of Services Do Payday Loan Debt Consolidation Companies Offer?

There is a wide range of services that payday loan debt consolidation companies offer these days. Gone are the days when mainstream consolidation companies would hesitate to offer their debt relief services to those consumers who were trapped in payday loan debts; but now that every state has imposed strict payday loan laws, even debt consolidation companies are taking great interest in dealing with payday loan borrowers. Their services range from credit counseling, consolidation of payday loan debts, payday debt settlement, payday debt consolidation loan and even the Extended Payment Plan (which is mandatory for payday lenders in many states).

Credit Counseling

As per the credit counseling services that payday loan debt consolidation companies offer, an expert credit counselor is appointed to review the specific case of the borrower. After doing a thorough review of the payday debts that the borrower is trapped in and the specific financial condition he or she is going through, the counselor suggests a suitable debt relief plan accordingly. In some cases, payday loan debt counselors can simply educate you about some budgeting tips, which can help you arrange enough fund to pay off your payday debts. In other cases, they can suggest you some excellent ways on how to pay off your extremely high rate payday debts by borrowing a very low rate conventional loan (with easy monthly installment plan).

Payday Debt Consolidation Program

Payday loan debt consolidation companies also offer consolidation programs, as per which they agree to work as a mediator between you and your payday lenders. They negotiate with your lenders and convince them to make the repayment terms more affordable for you, such as by waiving off certain penalty charges, by reducing the interest rates and by allowing you to repay the debts in installments without fetching additional charges. You are then requested to make a single, fixed amount of consolidated monthly payment to the company; the company then further disburses the payments to your respective creditors. These programs can thus help you take control of your situation, as you no more need to deal with your payday loan creditors directly. All collection calls are stopped automatically. However, here it is important for you to monitor the payment procedure; make sure that your creditors are getting their respective payments in a timely manner and that the same is reflecting in your credit report.

Payday Debt Consolidation Loan

This type of service that payday loan debt consolidation companies offer works a little different from their other services. The difference between a consolidation program and a consolidation loan is that the former does not require you to sign up for a loan, but the later does. In this case, the company issues you a new conventional loan at a comparatively much lower rate of interest than the rate charged by your current payday lenders. The negotiation still takes place between the consolidation company and your lenders in a way that reduces your overall payday debt obligations. The amount of this new loan is usually big enough to cover the negotiated amount of debt so that you can pay off the entire debt in one go. This way, you can eventually end up with just one loan with a very low

rate of interest and with a more favorable repayment plan.

There are many other services as well that payday loan debt consolidation companies offer, such as payday debt settlement plans and extended payment plans.

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What are the pros and cons of debt consolidation?