If you feel stuck in a payday loan, do not feel sad, it can happen to anyone. Between mortgages, student loans, and credit cards, it can get tiresome keeping track of payments and balances on outstanding loans and before you realize it, you’re neck deep in a payday loan trap.
Loans are sometimes inevitable because life can be unpredictable. However, what counts is how you choose to manage your debts. One viable way to get help with payday loans is debt consolidation.
Rather than feeling helpless, going around in circles in a payday loan debt, and paying off high-interest rates, try debt consolidation. The benefits of consolidating your debts are countless.
If you have outstanding loans, here are a few reasons why your debts should be consolidated by now:
Lower Interest Rates
One of the downsides to payday loans is the exorbitant interest rates that come with them. The high-interest rate makes it difficult to clear out your debt and become loan free, especially if you have several payments to make.
With payday loan consolidation, you get the leverage to pay off your debts with lower interest rates, which can help you save up hundreds and thousands of dollars.
Gives You An End Date
Another reason you’re still on with debt repayment is, you’re not sure when it ends. This is why your debts should be consolidated by now. Debt consolidation gives you an end date.
It can be frustrating when you feel like you may never get out of a loan you owe. Half the time, payday loans give off this feeling, notwithstanding the unending increase in their interest rate. This is why you need payday consolidation.
When you consolidate your payday loan into a personal loan or transfer multiple credit debts into a single card, you get an end date. This way, borrowers get to know when they can stop paying, no matter how much the debt is.
Improves Credit Score
Believe it or not, payday loans affect your credit score. Statistics show that consumers who consolidate their debts gain a 20-point increase in their credit score.
However, when you apply for debt consolidation, your credit score may drop a few points further due to hard inquiry. But once you get approved, you would see an increase in your credit score.
If you’re stuck in a loan trap, there are several ways you can clear out your loan using consolidation. However, the most common way is using a personal loan where you take out a loan to clear the payday loan you owe and then focus on eliminating the loan balance with a lesser interest rate.
Simplifies Payments
Keeping up with payment due dates between several creditors can be overwhelming. Debt consolidation eases this stress off you. With debt consolidation, your debt balances are streamlined into a single loan.
With this, you get to pay a single creditor till you’ve cleared all outstanding debt. This way, you reduce your chances of late payments that may damage your credit score further.
Final Word
Having outstanding bills, which is unmanageable, isn’t the end of the world. Look on the brighter side—debt consolidation.
Debt consolidation not only streamlines your bills but also gives you a lower interest rate. Such a lifesaver, isn’t it?
Enough said, do not dawdle anymore, take advantage of debt consolidation, and clear out those outstanding loans.
