Payday Loan Consolidation
It is estimated that 55 million Americans don’t have any emergency savings. This means that they often turn to payday loans for financial emergencies. Approximately 12 million people use payday loans. They typically cost $15 per 0 borrowed. A typical loan has an annual percentage rate of 39%.
Why are payday loans expensive?
Another interesting statistic is that 80% of payday loans can be rolled over or renewed in less than two weeks. Most of these unsecured loans have a payday loan repayment term of two weeks. This means that the loan must be repaid in full within two weeks. If the loan is not paid back, it will be “rolled over.”
New fees are added to the loan, making it exponentially more costly. This creates a vicious cycle of debt that can be very difficult to break. Consumers should consider payday loan debt consolidation to repay loans. There are many payday debt relief options for payday loans that don’t charge outrageous fees if you need a payday advance.
There are many ways to get out of payday loans.
In some cases, it can be challenging to make ends meet when you have a financial emergency such as a late utility bill or car breakdown. While a payday loan might pay off the car repair or light bill, it doesn’t leave enough money to buy groceries, gas, rent, and so on. These expenses will keep you behind and continue to mount. Here are other options you can consider:
Consolidation of Debt Loan
Consolidating debt is when you borrow a lower interest rate to consolidate multiple debts with higher interest rates. This results in one “consolidated” payment, which is easier to manage.
This is usually true for credit card debt. However, the same strategy could also be used to repay payday loans. Payday loans are expensive and can sometimes be disguised as fees. Outstanding Payday Loans offer a better option.
A debt consolidation loan will allow you to pay down your debt faster and is cheaper. So what’s the catch? To qualify for a personal loan, you need decent credit. You might have to consider other options if your credit score is not good enough.
Plan for Debt Management
Payday loans are not the only type of unsecured debt you might have. A debt management plan may be helpful if you have maxed out credit cards. Nonprofit agencies offer these plans. They also provide credit counseling. Counselors will assess your financial situation and make recommendations on how to reduce your debt.
A Credit Counselor can help you create a single monthly payment to eliminate payday loans or your debt if you are eligible for a debt management program.
Working with a Payday Loan Consolidation Company that will represent you to payday lenders is part of a payday loan consolidation program. A National Payday Loan Relief Program, Debt Settlement Program, or Debt Management Program are all terms that might be used to describe these services. They’ll charge you a monthly fixed fee and assume responsibility for paying your creditors.
When it comes to payday loan debt assistance or payday loan help, you want to work with reputable debt consolidation or debt relief business. The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have been looking at measures to regulate payday loan consolidation companies.
Consider programs for Employer-Based Loans.
You can also look into your employer for emergency loans. Many new companies have partnered up with businesses to offer loans through the employee benefits portal.
These debt consolidation loans usually range from a few hundred to a few thousand dollars. You won’t be disqualified if you have low credit scores. Loans are much more affordable than payday loans. It can be paid directly from your paycheck. This could be good or bad, depending on your situation.
Consider Payday Loan Alternatives
Some lending companies also offer alternatives to multiple payday loans. These companies do not have predatory tactics the way payday loan lenders do. For instance, Earnin allows you to withdraw $100-0 with no fees or interest. The payday loan company generates its income through tips.
Many payday loan borrowers who have much high interest loans might consolidate payday loans into another sort of loans, such as a personal loan or a payday alternative loan.
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