Are you the one among those thousands of Americans who are drowning in an ocean of payday loan debt (pdl)? If answered yes, then you should find out the right way to get out of the debt.
Ignoring the payday loan debt can create a financial havoc. If you roll over the loan, you may end up paying more in fees and interest rate than the original amount.
Most of the time, people get trapped into the payday loan debt. They don’t know how to attack the debt to get rid of it. Well, many strategies work great for paying off the payday loan debt. But, payday loan debt consolidation is perhaps the best way to get out of payday loan debt.
Is payday loan debt consolidation a worthy choice to get rid of your high-interest debts? Have a look:
1. You can bundle your payments
Instead of having to make multiple payments to multiple payday loan lenders, you just have to make a single monthly payment towards the debt consolidation loan. Try to make the monthly payments on time.
Once you opt for a consolidation program, you just need to write a check to the payday loan debt consolidation company and the payment will be disbursed to your creditors in due course of time. As your lenders get the money, you will soon become debt free.
2. Negotiations on your behalf
The debt consultant of the consolidation program will start negotiating with your multiple lenders and make sure they lower the interest rates on the loans. As the payday loans usually carry outrageously high rates, you must try your best to lower the rates. This is possible through a debt consolidation program.
3. Lower monthly payments
Previously you had to make large monthly payments with your multiple payday loans, now you just have to make a lower monthly payment with a debt consolidation program. As the interest rates are lowered, the monthly payments are also reduced, thereby enabling you to save enough money every month.
4. You will not get collection calls
Once you enroll in the debt consolidation program, the payday lenders will usually not send your accounts to the collection agencies. Thus, you will not get any harassing calls from the collection agencies.
5. Boosts your credit score
If you have already hurt your credit score due to late payments, you can opt for consolidation to add positive items on your credit report. As you get back current on the monthly payments, this will be reported to the credit bureaus and this will help you boost your score, too.
6. Your money is safe
Once you enroll with a payday loan debt consolidation company, the payday lenders can’t take out money from your account. The debt consolidation company stop the automatic payment from being charged to your account by giving your bank an ACH to revoke the order.
7. Drastically lower interest rates on the loan
The debt consolidation loan that you take out will carry a lower interest rate than the payday loans. Since you’re already suffering from outrageously high rates, it is most likely that you will want to lower the rates after combining them. This is only possible with consolidation. With lower rates, you can easily lower the monthly payments and repay the loan in easy and affordable monthly payments.
8. Elimination of late fees and penalties
If you’ve taken out too many payday loans and your monthly income was not enough to help you pay off the pdls, you must have made late payments. But with a debt consolidation program, you can easily eliminate the late fees and penalties on the loans, thereby making it possible to reduce the monthly expenses.
Lastly, payday loans are meant for the emergency purpose. Thus, whenever you decide to take out a payday loan, you must take out a small amount, so that you’re able to repay it soon.