Payday loan consolidation simply means borrowing more money to pay-off multiple payday loans, most likely breaking the vicious cycle of constantly re-loaning high-interest money. You may seek payday loan consolidation either with a conventional payday loan or cash advance, such as the payday loan you may have taken out on a previous occasion. But when taking out a payday loan from a new source, it is important to ensure that you have chosen a well-trusted and reliable company - one that has built up a good reputation over many years. Here are some pointers for choosing a reputable payday loan consolidation provider:
- Look for well-established and reliable companies in the market. A lot of new payday loan consolidation lenders have been set-up in recent years, and their main focus is to fill-in the need for quick cash. Because these new, inexperienced companies lack experience in dealing with high-risk borrowers, they may not be able to protect you from unscrupulous lenders who may offer you sub-par rates or other forms of fraud. For this reason, always take time to research about a particular lender before signing on the dotted line. Check the Better Business Bureau or online forums to determine if there have been any complaints against the company, and also check if it is licensed in your state. Check out this post for more details related to this article: https://en.wikipedia.org/wiki/Payday_loan.
- If possible, find out the lending fees involved before choosing to take up a payday loan consolidation now. These can vary significantly, and it's wise to go for a company that charges fees only when borrowers repay their debts. Although this is not usually an option when borrowing cash from a traditional lender, there are some newer companies who provide no-obligation online applications that do not require a membership fee. In this case, you would only be charged for the actual interest on your consolidated balance.
- Payday loans are short-term, and they should be paid off on your next payday. However, some borrowers like to take them over several months, and if so, these should be repaid promptly. Before taking on a payday loan consolidation, ask whether you can extend the period of time allowed to repay the loan. Some companies allow extended payments, but you will end up paying more interest in the long run. To avoid being caught in this situation, choose a payday loan consolidation that allows you to make a single monthly payment. This way, you can better manage your personal finances.
- When going through a payday loan consolidation, always be sure to confirm with your personal bank or credit score provider whether your debts can be consolidated into one account. It is possible to apply for consolidation loans online, but sometimes it takes a while before the money gets to you. Also, when applying for credit cards to consolidate your debts, make sure to check their terms and conditions, and compare them with the proposed terms of your payday loan consolidation. This way, you will ensure that you will get the best deal.
These loans can be a good option to consolidate all your small, short term loans and pay them off with a single larger loan. However, it is important to realize that if you consolidate payday loans with high interest rates, you may find yourself paying more in the long run. If you need extra cash immediately, consider borrowing from a friend or family member, but make sure you will be able to pay them back when their payday arrives. If not, you may find yourself in an even worse financial situation than you were in when you took out the original payday loan.
