Payday Loan Consolidation – Can Debt Consolidation Help You Eliminate Payday Loans?
A Payday Loan is a short-term loan that must be paid back on your next payday or within two weeks. They can be a lifesaver in a crisis, but the interest rates and fees are often excessive and can trap you in an expensive cycle. Debt consolidation may help you escape this cycle and save you money in the long run. Resource: https://www.nationalpaydayrelief.com/payday-loan-consolidation/
With debt consolidation, you take out a new loan with a lower rate to pay off your existing loans. This can be an effective strategy for eliminating high-interest debt, like credit card debt. But it can also work to eliminate payday loan debt in states with reasonable interest rate caps or that offer payment plans. Taking out a personal loan to repay your payday loans can have the added benefit of longer repayment terms (up to 60 months), which can give you more time to pay off what you owe, and lower or even fixed fees, so that you know what to expect each month.
The Ultimate Guide to Payday Loan Consolidation: How to Escape the Debt Cycle
A personal loan can also be reported to your credit bureaus, so paying your debt on time may improve your credit score, especially if you sign up for autopay so that your payments are always on time. If you cannot qualify for a personal loan, another option is to work with a credit counseling agency that offers payday loan relief. With a debt management plan (DMP), you work with a counselor to negotiate with your creditors for better loan terms and you send a monthly payment to the credit counseling agency, which then pays your debts.