Payday loan consolidation can be the answer to all your debt troubles. Although payday loans may be able to give you an immediate supply of cash for emergencies, what if the emergency is an inability to pay the installments on these loans? There’s an easy way out!
Although some issues can result from payday loans, solutions do exist. For example, you may pay a 400% APR on your payday loan installments. However, if you choose to consolidate all your payday loans into one loan, you can reduce the interest you must pay.
Payday loan consolidation is a lot different from rolling over your current loan. The main difference is in avoiding the debt trap by choosing a less expensive personal loan. This lower-interest and low-debt loan improves credit in the long run.
How Does Payday Loan Consolidation Work?
You might be wondering, “How does payday loan consolidation work, and how is it different from other kinds of loans?” Most people initially think consolidation will get them back to square one or turn their situation from bad to worse!
That’s not the case. Loan consolidation is when you take out a new loan at a lower rate than the past loan and use that one to pay off all the accumulated debt. Sometimes, debt consolidation lenders can also pay off your previous loan automatically if approved.
Rolling over is much more expensive because it comes with additional fees and terms and conditions attached. However, with consolidation, you get to only deal with the accumulated loan and the new terms and interest rates.
How to Consolidate All Existing Loans
Here are some steps you must take to consolidate all your existing loans;
- Plan: Before you opt for consolidation, create a plan and tally up all of your loans to determine whether you will get approval. Add up all of your balances on your loans for the amount.
- Credit: This is the loan you need to get! Check your credit score while you are at it to determine whether you will get the approval. Credit scores can also impact the terms you receive, so be careful!
- Explore: Don’t just settle on one amount for consolidation. If you are applying for a personal loan online, you should shop for it and look for the best deal you can get.
- Apply: Start applying for the loan and choose the lowest interest rate. Ask your lender whether they will take care of your previous loans or if you will need to sort them out personally.
- Repay: Keep a reminder to avoid missing any more deadlines and getting entangled in a debt trap. You can also set up automatic payments to never miss a payment.
Benefits of a Payday Loan Consolidation
Here are some of the benefits you can receive from consolidating your past loans:
- Affordability
Payday loan consolidation makes paying off past loans much more affordable. Consolidated personal loans have a lower fee and often lower rates. You can get a credit card loan for much cheaper than the 400% interest rate on payday loans.Speak to your loan provider and try to get terms that work for you. Do not agree to anything you cannot manage in the long run, and always consider your monthly expenses when calculating. - Predictability
You don’t want to be stuck keeping track of all of the loans you have accumulated over the years. You want to enjoy your life without thinking about the deadlines you must keep up with to avoid a worse credit score.Once you consolidate all your loans into one personal loan, you just need to keep track of that one. This means you must make a single payment with a fixed interest rate (terms and conditions apply) until you have paid off the entire loan amount. - Peace
You get peace of mind with one personal loan. You may never get this with multiple payday loans you need to track. Thinking of more than one loan that you need to pay can get tiring. You should consider consolidating them and getting assistance from a professional.Professionals like Solid Ground Financial can help you navigate the intricacies of loan repayment. With one loan, you get fewer reminders and have to make payments less often! - Flexibility
Payday loans have much shorter repayment durations, whereas personal loans are much more flexible. You can repay in the next month or stretch it out to a couple of months. This leads to a lower negative impact on your credit history if you cannot repay the loan in a short period.Payday loan consolidation also gives you multiple repayment plans depending on your financial situation. You can even stretch out the repayment over the next few years. - Credit Score
Personal loans may seem damaging to your credit score, but that is far from the truth. Sure, the first hard credit inquiry may lead to a small dip. However, when you begin to repay the amount bit by bit, the increase in your score will considerably outrun the initial dip.Banks may need to perform that hard credit inquiry to understand your financial position and determine whether you can repay the loan amount. If you don’t have a high credit score, you can search for online lenders willing to provide you the loan you need. - Consequences
There are far fewer consequences to missing a deadline for personal loans. In the case of payday loans, an extension can lead to a late fee, increasing your debt. This is why you need to work with a payday loan consolidation service company to learn more about the benefits and the best way to approach the process.
How Solid Ground Financial Can Help
Solid Ground Financial can you assign professionals who understand your financial situation and give you advice accordingly. They can guide you to the ultimate payday loan consolidation route that helps you repay the debt as fast as possible!
Final Thoughts
Payday loan consolidation can help you get up and running, submit payments on time, and get out of debt as soon as possible. It can also assist you so that you can escape the endless, vicious cycle of debt that takes you further away from your dreams.
