First of all, what is a payday loan debt? This is a loan that you can get from a cash advance office that will lend money without requiring a credit check through the major credit bureaus.
Typically, payday loans are given in increments of $100, depending on your personal financial status. You must pay the loan in full by the due date or pay harsh penalties for late payment.
The Advantages and Disadvantages of Payday Loans:
Payday loans, along with any other type of unsecured loans have both advantages and disadvantages. You should be aware of these and do your homework before taking a loan out.
Due to the complications of our finances, taking out loans, especially payday loans- due to their loose requirements- has become commonplace. Before you take out a payday loan, you should research the interest rates and how many times they will allow you to refinance before having to pay it off.
You also want to find out how much you will be expected to pay each week and whether that will cause you more headache than you currently have.
As mentioned, these payday loans have lots of ups and downs. The primary advantage is the fast approval process and you will have the cash within 24 hours. So, if you have an emergency, they’re great because you won’t be waiting for weeks to find out if you’re going to qualify for the money.
The interest rates are typically high, but they will not change based on your contract. So, while this is a great thing, you should think it through, making sure that the rate will not cause you more financial stress when it comes time to start paying off the loan.
There are no credit requirements for payday loans- the only requirement is that you have employment and a steady income. You won’t be asked for collateral or have a family member or friend co-sign for you.
Of course, these payday loans also have several disadvantages as well, the biggest one being the high interest rates. Though it doesn’t change once you lock it in, it is still much higher than what you would get at a bank or with a secured loan.
Typically, the time that you have available to pay off the loan is shorter than you would get using a credit card. If you can’t pay the loan back, they will automatically take the funds from your bank account and if you try to avoid paying it off, the lender is likely to send debt collectors after you.
Overall, payday loans are very easy and convenient. However, if you don’t make the payments on time, you will likely find yourself in trouble. So, think it through carefully, weighing the benefits with the risks.
Finding Help with Payday Loan Debt:
If you need help with payday loan debt and you feel like you’re drowning in debt, there is a way out. You can consolidate your payday loans.
What is a payday loan consolidation? This is where you work with a loan consolidation program to get your interest rates lowered, or you get another loan to pay off your current ones, thereby leaving you with one note instead of several.
When it comes to payday loan consolidation, there are two different kinds: payday loan consolidation program and consolidation loan.
The payday loan consolidation program is basically the same thing as a debt consolidation program. The loan consolidation companies work with the lenders to reduce your interest rates, which will make the payments much more affordable for you.
Then, you will make monthly payments to the consolidation company and they will disburse the funds as necessary.
If you don’t want to work with a consolidation company, you can look into getting a debt consolidation loan. This will pay off your payday loans, which means that you will have one payment instead of several different ones.
However, the thing with the consolidation loans is that the loan terms are longer and the interest over the long term adds up. So, this means that payday loan consolidation programs are a much smarter option than debt consolidation loans.
Payday Loan Consolidation Program Advantages:
When you choose a payday loan consolidation program, you will receive the following benefits:
1) Lower rates on your payday loans
2) Affordable monthly payments
3) One single payment every month instead of several
4) Over-limit charges and late fees are all dismissed
5) You can avoid those annoying collection and creditor calls
6) You will show paid off accounts on your credit report, which will have a positive impact.
7) You deal with one creditor and one payment rather than multiples.
8) Since you only have one payment, it’s easier to budget your money.
Going through a consolidation company will give you a way to get help with payday loan debt. Remember – you don’t have to do it all on your own. There are legitimate people out there who can help you get your personal finances back in order.
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