Types Of Debt Consolidation Loans For Payday Loan Debt
The payday loan debt is usually a small amount, but only if you avail it on some urgent occasions – not very frequently. But, when you take these types of loans as a convenient way to meet even your normal financial needs on a frequent basis, it takes the form of a monster that eats away your finances.
You lose control of your finances and find yourself in a helpless situation where you are unable to pay off the debts. In such cases, a payday loan debt consolidation service emerges as an ultimate solution for you. There are basically two types of debt management services available to you when it comes to the repayment of the substantial cash advance debts.
Secure Debt Reduction Loans
The first option is to go for the secured . As the term suggests, these are secured consolidated loans, which means you need to pledge collateral against such loans. For example, if you have a home and are ready to put it as collateral against the consolidated loan, you will be able to enjoy the features of a secured loan. The greatest advantage of the secured consolidated payday loan debt is that, you will have to pay a much lower rate of interest. Even the penalties, if any, might get written off. What is more, you will be able to pay off your debts in a much shorter span of time. However, here, it is also important for you to understand that in case you make any default in the repayment of the consolidated monthly payments, the payday loan lender might seize the property you put as collateral.
Unsecured Debt Reduction Loans For Cash Advance Debts
If you do not want to take any risk, there is also an option to go for the unsecured debt consolidation loans. For these types of services, you do not need to pledge any collateral. However, because of this, you will have to pay a comparatively higher rate of interest and a higher amount of the consolidated monthly payments. What is more, it will also take a much longer time to pay off your payday loan debt. However, since there is no collateral involved, there is no risk of losing any property.
However, you should also note that no matter which kind of option you choose to go for, you should make sure that you are not making any default in the consolidated monthly installments to pay off your payday loan.