A payday loan is a convenient way to borrow money to cover inconveniences and emergencies, but they don’t leave you with much breathing room in the meantime. These payday loans often have huge interest amounts, leaving almost anyone devastated. If you do not plan to repay a payday loan smartly, it will definitely cost you a good deal of money in interest.
However, various payday loan consolidation services are in the market, helping people get better repayment terms to save money. If you are troubled with the high monthly payments of your payday loan, then consolidating it with a professional consolidation service can prove handy. But first, you need to know some basics about payday loan consolidation services.
What is Payday Loan Consolidation?
Payday loan consolidation is a type of debt resolution in which the borrower agrees to consolidate his/her payday loans with the help of a company. In exchange for the Payday Help funds, the company promises to pay off all payday loans that you have taken with them.
The advantage of using a service such as this is that if one loan is paid off instead of having all your loans and obligations be paid, saving you time and money. Consolidation services are also helpful as they can help you get fair repayment terms on your loans with lower interest rates, which can save you money.
However, choosing a consolidation company can prove to be a challenge as many companies in the market offer this service. With that in mind, here are some tips on choosing a reputable payday loan consolidation company.
Payday Loan Consolidation Service
Payday loan consolidation services are known as debt resolution services or debt counseling. These companies help you get better repayment terms for your Payday Help loans by paying off all your loans for you. They take your existing payday loan obligations, pay them off to the creditors, and then reissue your new consolidated loans with better repayment terms.
As a borrower, you have no responsibilities or liability after completing the consolidation. Therefore, a reputable consolidation service can offer you a better repayment term at lower interest rates than you might expect to get through your current lender.
How Can You Save Money with Loan Consolidation?
As stated previously, the basic idea of consolidation is to allow you to get a better repayment term and, most importantly, lower interest rates on your loans. You do not even pay any fees for it. But what if, besides having a thriftier payment method, you can also save money by consolidating your payday loans with a company offering the best deals?
Some repayment schemes offered by some companies in the market that offer payday loan consolidation services are as follows:
- Different loan amounts are reduced to have the same monthly payment amount depending on your loan. That means less money will be paid, but your monthly payments will stay lower. Therefore, loans with a higher average balance may reduce their balances more than those with low balances.
- The interest rate is reduced for the consolidation loans you have taken and the new ones issued to you. However, this type of loan has a higher monthly payment because your total monthly obligation is the same but bigger.
- You may pay less interest or no fee if you consolidate some or most of your loans. This kind of loan has lower monthly payments, but it requires more time to pay off all obligations than other consolidation loans, especially if there are many of them.
If you can get better repayment by getting rid of paying fees and lower interest rates on your existing payday loans, consider consolidating them with good debt resolution companies.
Tips on How to Save Money with Loan Consolidation
Regardless of your chosen consolidation company, you can still save money with an affordable repayment plan. However, you should do a little digging before deciding what kind of loan to get.
- If there are two similar consolidation companies, don’t always go for the one that offers the best rates or cheapest repayment scheme and avoid free loan offers.
- Another way to save is to consolidate your loans online. You can do so by going through some consolidation portals available on different websites.
- Borrowers using these consolidation companies have reported getting better deals on interest rates and fees than they would have gotten on their own.
- Do not forget to check into each fee and any optional services you do not need in your consolidation contract.
It’s always a good idea to do a little research about each company first before signing up for it. Always consider how much the service will cost at the end of it all. Also, negotiate with your company over fees and payment terms to ensure you get the best deal possible.