First let’s outline what a payday loan is.
Payday loans are a type of debt individuals obtain from short term lenders. These lenders provide the loans usually for about two to three weeks at which time the total amount, plus a fee is due to be paid back.
The problem with this type of debt is that many people find it difficult to get back on track and repay the debt in full with their next paycheck and many people end up re-loaning. This makes it very hard for that individual to be able to get ahead on their debts.
However, there is help. Consolidation companies are a great solution for ending payday loan debt once and for all and you have a few options available to you:
1) Payday Consolidation Loans
One of the options available to you is a payday consolidation loan. This type of loan allows you to consolidate all of your payday loan debts into one payment. These are often harder to get than non-loan offers, but they can offer some great benefits.
Specifically, they may or may not require collateral to secure them. They often offer a lower interest rate than you would be paying on the debt you already have plus the fees youre paying the lender. With this type of loan youll repay it over a period of two or three years with the interest rate set by the lender.
2) Payday Consolidation Programs
Another type of help comes from companies that offer consolidation programs. Like a traditional consolidation loan this option allows you to repay your debt over time.
These programs do not actually create a loan for you. However, they work on your behalf with your payday loan lenders and will work out an agreement for repaying what you owe.
The interest rate will be much lower. You’ll pay less overall than going on the same path youre on now. You will make one monthly payment to the company instead of paying each of your lenders separately.
Consolidation companies are a good option for most people who cannot afford to pay off their payday loans outright. By working with a consolidation company you can stop the collection calls, end the fees and interest and start working to rebuild your credit.
If youre struggling to get caught up or youre finding yourself re-loaning the funds each and every week because you cannot pay off the debt in total, consolidation can be a very good solution for you.
There is no reason to be caught in the payday loan cycle. Talk to these companies and find out what they can offer you and see which consolidation option works best for your situation.