The estimated number of Americans that out payday loans annually is more than 12 million. This is quite alarming because taking a payday loan is more expensive than other loans. Additionally, the payday loan payment schedule restricts the borrower to a shorter time to repay the loan.
Many payday loan borrowers may not be able to repay the debt at the appointed time, making them land in a debt cycle. However, it becomes possible to pay off such loans with ease with debt consolidation. However, it is not enough to take out a debt consolidation loan. Knowing how best to make the most of your consolidation journey is also vital. How can you master payday loan consolidation like a pro?
#1. Scout for Different Consolidation Options before Making a Decision
Mastery of payday loan consolidation does not restrict you to a particular payday loan option. One can take out a payday loan from traditional banks, credit unions, and other lenders. Different lending platforms offer different interest rates. Therefore, checking different payday loan consolidation options before settling for one will ensure you get the best rate possible.
#2. Stick to the Debt Repayment Plan
It will be challenging to make the most out of a payday loan debt consolidation plan if you do not make timely payments on the agreed date. By honoring the loan terms and sticking to the repayment schedule, you will succeed in paying off the debt on time and improving your overall financial outlook.
#3. Decide on the Best Consolidation Option that suits your Situation
If you decide to consolidate your debt, you can either take out a debt consolidation loan or enroll in a debt management program. While both will help you pay off your payday loan, they are different in their application mode.
A debt consolidation loan allows you to take out a large loan with lower interest and use such a loan to pay off the payday loan. Why this consolidation option has its perks, there are downsides to it. It may be challenging to convince lenders to give you such loans if you have a bad credit score.
However, you can enroll in a debt management program where the debt consolidation loan seems unlikely to be viable. Financial experts will help you manage and pay off your debts. The credit counseling team will negotiate a better payment plan with lenders to reduce your pressure.
Conclusion
To make the most of a consolidation plan, it is crucial to consider the different available options. A careful analysis of your options will help you master payday loan consolidation like a pro.
