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Help And Advice To Consolidate Payday Loan Debt
Go Straight To List of Recommended:
UK Debt Consolidation Companies
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US Debt Consolidation Companies
See Also: Advice On Debt Consolidation Loans
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Help To Consolidate Payday Loans
Payday Loans are very tempting because they are such a fast and easy way to get cash when you really need it, but if you are not able to pay them back in full and on time, the interest and penalty charges can mount up incredibly quickly. When this happens, it is not unusual for people to end up owing far more in extra charges than they borrowed in the first place.
It is important to understand how to use payday loans sensibly, and to use only reputable lenders. This is covered in more detail on the main payday loans page of this site. The worst problems tend to occur if you take out more payday loans before paying back existing ones. Multiple payday loans can quickly become impossible to deal with.
It is very important to consolidate payday loans as quickly as possible, because your debt will continue to mount up rapidly until you pay them off. They are fine if only used for what they are designed for, which is to borrow money for a one off charge for only a few weeks at most. As soon as you extend that period and apply payday loan charges over a longer period of time, it makes no sense at all and is one of the most expensive ways to borrow money.
Debt consolidation is a way of making it more possible to deal with your debts by bringing down the amount you have to pay each month, and preventing your debt from growing any further. There are two main ways you can consolidate payday loans, either by paying them off with a new loan or by using a debt management plan.
Borrowing Money To Consolidate Payday Loans
Normally I would advise caution with regard to using debt consolidation loans, because it is important that you only use them to pay off debts that are at a higher rate of interest, but with payday loans that is pretty much taken for granted! The only possible issues are if you have credit problems you may be limited in where you can get a larger loan for a longer period, unless you are a homeowner. Even a personal loan from a bad credit lender is likely to be at a much lower rate than a payday loan.
The easiest approach to getting help to consolidate through a loan is to apply to specialist brokers that run your requirements past lots of different lenders, which increases your chance of success. You can find out more about borrowing money and a list of some recommended lenders and brokers on the main borrow money/loans page of this site.
Using A Debt Management Plan To Consolidate Payday Loans
If your debts have mounted up substantially, a debt management plan is probably the best answer. These are generally less risky than taking out another loan, as the whole thing is geared towards reducing the amount of your debt to make repayment more affordable.
A debt advisor will negotiate with the payday loan companies that you owe money to in order to agree reductions in the interest charges and any penalties and extra charges, even perhaps writing some of these off. They will agree new terms for paying back the remaining amount, and all you do is make one affordable payment to the company. They then have the hassle of dealing with the payday loan companies and passing on the new payment amounts to them.
Even if you are not sure about whether your situation is appropriate for a debt management plan, you can apply to a good debt management company very easily and they will go through your situation with you in detail and then advise you on the most appropriate course of action to solve your debt problem. All the leading companies have simple online forms that you just submit, and they get back in touch with you by telephone.
You should always apply to a few different companies before committing yourself, and you are under no obligation to accept any proposals you receive. You can find a list of recommended debt consolidation companies on the main Debt Management page of this site using the links below:
Recommended Debt Management Companies For The UK
Recommended Debt Management Companies For The US
Help To Consolidate Payday Loans For Very Serious Debt
In order to qualify for help to consolidate payday loans with a debt management plan you will need to have a steady income and be able to afford a reasonable monthly payment towards your debts. If you have a lot of debt and not much income, you may need to consider debt settlement (for US residents) or an IVA (for UK residents).
Debt settlement is a way of getting agreement from the payday loan companies to write off a large part of what you owe them and it is a way of dealing with really serious debt situations where you might otherwise have to consider bankruptcy. When debts get beyond the point at which it is possible to find a way to repay them in full, writing off most of it is often the only way to become debt free again. In the UK, an individual voluntary arrangement is a formal agreement that allows you to achieve the same result. You can find out more about both of these debt solutions on the Debt Settlement and IVA pages of this site.
