Consolidate Your Payday Loans
How You can Lower Your Rates with Consolidation of Your Payday Loans
When you consolidate your payday loans, it will provide you with the opportunity to close a number of your existing payday loans with one, much less expensive option. This is a common option for borrowers who find themselves with too many high cost and high risk payday loans all at the same time. If you are caught in the cycle of payday loan debt, then you should consider consolidating these debts in order to achieve a higher level of financial freedom.
The Cycle of Payday Debt
The main cause of several payday debts for one person is the cycle of repeating debt that this type of financing can result in. These types of loans have an extremely high rate of interest and are typically expected to be paid back in one, large sum, rather than installment payments. This means that you will have to come up with an amount of money that is much more than the original amount you borrowed. If you are unable to come up with the funds, then you might be tempted to seek another payday loan in order to pay off the minimum balance and also avoid the penalties that are applied. This is an extremely common occurrence and the fact is that payday lenders like this scenario since it guarantees that they will have a consistent profit from only one source.
Taking the Consolidation Loan
When you begin to look into how to consolidate your payday loans, you will see that this is one of the few options that you have to finally break the cycle. The thing to remember is that you should avoid consolidating your existing payday loans with yet another payday loan. Your ultimate goal needs to be to get far away from this environment of high risk and find a source of more stable financing. The majority of payday borrowers have a credit score that is less than ideal, meaning that they will not be able to qualify from a traditional, low-rate bank loan. However, there are still other options. For example, you may be able to qualified for a higher risk, secured loan with another lender.
Reducing Your Existing Debt
When you consolidate your payday loans, then you will be able to have all of your existing debt put together and then make a simple, one-time payment each month. This will put you in the situation where you will be completely free from the cycle of payday debt and only have to deal with one payment for the foreseeable future. Additionally, this new loan will likely have a lower rate, since the payday loan is known for having the highest interest rate applied to loans.
If you would like to learn more about how to consolidate your payday loans, visit our pages within the website.