In America, millions of people take payday loans every year. The problem is they are not aware that they are falling into the trap. People think payday loans are to ease their financial burdens, it is not. If you are taking a payday loan then you are going for the most expensive loan. If you are not able to pay back your loan on time it can exceed up to 300-400%. Sometimes people can repay the loan and other times they get stuck in the cycle of debt. Just imagine the one time you fail to pay the loan debt it is going to double.
All those who are stuck with their debts might be looking for a solution which is Payday Loan Consolidation Help.
What is it?
When people face financial challenges payday loans are the easiest way, but the fact is it can lead to long-term financial crises. There is one solution and that is a consolidation of your debts. It is designed to combine all your high-interest debt into one single lower-interest loan. When you take a payday loan you have to pay it back in a couple of weeks. This is a very short period and people fail to manage it oftentimes. Payday loans can also be renewed and extended which means more interest rate is added to the loan. When you shift your loans to consolidation it puts end to your debt cycle. You have to pay back just one loan, a lower interest rate and you also get a pretty good amount of time to pay it back.
How does it work?
All those who are stuck with their debt cycle must consider loan consolidation. You will be amazed to know how great this solution can be when there is no other way out. All your big loans will be swapped into one low-interest rate. When you apply for it you are taking another personal loan from the lender but with a lower interest rate. When you take a personal loan you have at least 4-5years to pay it back and the interest rate is also lower. Payday loans mostly attract those who are already in debt and have low credit scores. When you go for Payday Loan Consolidation Help your credit score has nothing to do with that. It is a solution that eases people with a low credit score as well.
Debt settlement or loan consolidation
There are two options for people either to go with debt settlement or loan consolidation. According to the experts, you must go with loan consolidation. It is a better option as compared to debt consolidation and also safe. Debt settlement is a riskier option as suggested by the national federation for credit counseling. It is risky because the charges are hefty. If you get to indulge in the debt settlement process it is likely going to hurt your credit score. Some companies are going to negotiate on your behalf and there is no guarantee that it will work. Debt settlement means you will pay less on what you own. On the other side, debt consolidation means that all your debts will be paid with a guarantee until your one new lower-interest loan is paid by you.
Will it hurt my credit score?
Pros of consolidation
· Payday loans need to be paid at least in two weeks but with consolidation, you get years. It makes it easy to manage your debts while carrying out your other expenses.
· Payday loans have high APRs but when you consolidate with another loan you get a low-interest rate loan that helps save money.
· When you go for loan consolidation you put an end to your debt cycle. There is no line of credit or rollovers left. There is zero balance when it comes to your different types of loan debts. You just have one monthly payment to return till you send your loan.
· It helps in motivating to get out of debt with ease. Now you just have to concentrate on paying off one loan which is low in the amount now.
· If you fail to pay the payday loan debts you will be dragged into court. Loan consolidations help you with all the hassles.
Cons of loan consolidation
· Loan consolidation eligibility criteria are tough because it needs affair deal with a credit score.
· You are paying your debt with more debt
· When you go for personal loans the borrowing amount is low as compared to the other types of loans
You must explore your options as Payday Loan Consolidation Help may not be a good idea for you. There are other options you can go for and to seek help you can visit Real PDL help to know about your alternatives. They will definitely help you to get out of the payday debt situation.