So, you have multiple payday loans in your account because you needed them in an emergency. It’s a common gateway for individuals. However, no one is unaware of the interest rates and the costs it entails. And if you have a few in your credit report, juggling with them period may be challenging. Moreover, the interest costs and penalties fume up the costs further.
If you want to manage your payday loan debts, payday loan consolidation may help. It is one of the best ways to pay and consolidate the loans into a monthly payment.
What is a payday loan debt consolidation?
Payday loan debt consolidation is when you want to pay off multiple payday loans. One can do so by merging them into a single loan agreement. By consolidating a payday loan with a lower-interest personal loan, you share a more extended repayment period. Moreover, it reduces your monthly payments and interest rates. Additionally, having simply one loan settlement can feel overwhelming. It assists you in sticking to your debt payoff method.
Thus, to consolidate payday loans, you must apply for a personal loan. Once approved, you will obtain a lump sum of funds that you’ll operate to pay off your payday loans. It will help you make payments on your new personal loan unless you pay it in full.
When is payday loan consolidation a great idea?
As long as you can be eligible for a personal loan at a lower interest rate than payday debts, payday loans are a good idea. Though payday loans have a high APR of 400%, it may never exceed 36%. It makes a payday loan an affordable one.
Moreover, a payday loan consolidation is a personal loan with feasible terms and flexibility. Unlike payday loans, where you pay the dues every month, with personal loans debt consolidation, you pay monthly instalments for up to 6-7 months. A longer agreement implies a clear payment route with small and fixed instalments. It would not change over the loan course.
Can you consolidate debts if unemployed?
Yes, you can consolidate the debts even if you have been jobless for a lengthy time. In this case, the lenders consider part-time income and benefits that an unemployed has. You can consolidate loans using payday loans on benefits income. It will help you qualify without much difficulty. You can use the loan either to consolidate debt or for any emergency without worrying about the unemployed status.
5- step-wise ways to consolidate debts using payday loans
Suppose you believe that consolidation is the best way to clear debts quickly. Check payday loans for debt consolidation. Here are the step-wise ways to get a personal loan for debt consolidation.
Add your payday loan balances
It is the first thing to do. Add up your total payday debts in the credit score. Consider the pending ones from the old to the recent ones. Consider the penalty, interest and missed payment fee. It will help you calculate the total amount you must pay.
Compare the best options
Once you know the total amount, search and compare loan options. Identify and check the APR, interest rates, additional charges, penalty charges, missed charges, etc. Additionally, analyse the hidden and prepayment fees. It may impact the overall loan costs. While you may work to find a suitable lender, avoid going through the brokers. It may imply additional fees or brokerage to get the lender to deal with.
Instead, you can get payday loans in 15 minutes with no brokers’ requirement. It helps you get quick cash without delaying the purpose. Finding the right lender is time-consuming. Moreover, going through a broker implies sharing your financial status and needs with every single lender. It may impact the privacy you need in financial dealings.
Pre-qualify with the lender
It is one of the best ways to know the loan costs and affordability. By pre-qualifying with the lenders you shortlist, you can check the costs. It will help you know the monthly repayments, interest rates, APR, and other costs. Most lenders provide a pre-qualification facility to borrowers without impacting their credit history.
Apply for the loan and get funds
If you get the right lender, apply for the loan. You can do so by pointing to the loan form. Check the spelling, details and documents before applying for the loan. It will help you avoid rejection. Before applying, check the repayments, payment terms and other primary aspects. It will help you follow up with payments.
Pay off lenders and begin repayment
Once you get the final terms and the agreement, you deal with only one lender. Instead of paying to multiple lenders, you pay only to one. If you neglect it and use the money elsewhere, you may end up in deeper debt. Once you pay your debts, make a plan to pay your loans. Missed payment can mean a late fee. Thus, do not delay the payment over 30 days, or you may end up in debt..
If you have too many payday debts, you can consolidate using a personal loan. It will help you reduce your liabilities on the loan and reduce monthly payments and interest rates on the loan. Moreover, it helps streamline your finances and plan for future expenses and goals. It also helps improve your credit score.
Williams Adams is the Senior Content Writer and Loan Advisor at Loansevents. He is passionate about finance writing and has written thousands of blogs for the top platforms worldwide. In more than 13 years of experience, he has worked with leading lending firms in the UK providing various loans. At Loansevents, Williams does the major task of writing researched-full blogs on multiple loans and financial concepts. He has done MBA in Finance in the UK to back his finance skills.