Payday loans or pdls, in short, can be your savior when you are in dire need of fast cash. If you use it correctly and with good intent, then you might have a positive experience with it. Pdls are easy to take out and no credit check is required, making them appealing than personal loans or a credit card cash advance.
But, is taking out a pdl really a good idea?
Well, a 2015 report by the Pew Charitable Trust says about 12 million people in our country opt for pdls each year and spend about $7 billion on debit fees! Can you imagine?
Incessantly high Annual Percentage Rate (APR) being the reason for this kind of incurred debt fees. You will be shocked to know the APRs of payday loans or cash advance loans. Though it varies from state to state, still a typical APR of a pdl can be around 400%!
That’s why pdls are still in the stain for wrecking up people’s’ lives and thrusting them into a startling amount of debt!
So, if you are trapped and overwhelmed with your pdls, you can opt for pdl consolidation program to get rid of this situation.
For that, we have brought you some real facts and figures about payday loan consolidation! Here you go! Unveil the secrets!
1. Single monthly payments
Yes, you heard it right! You can pay off easily by consolidating all your pdls and paying them off by making single monthly payments. But, how will you do that?
You just need to approach a genuine payday loan consolidation company. They will make a thorough review of your finances. Based on that, you have to make single monthly payments to the said company, which in turn will distribute the money among your creditors.
But always remember, a pdl consolidation company will take professional charges for providing these services.
2. No need to worry about payment dates
Are you tired of managing your payment dates of your pdls?
It’s really very exhausting when you are already trapped with your debts and have to remember each and every payment dates of your pdls!
But, you can get rid of this headache once you opt for a payday consolidation program! You have to make single monthly payments to the consolidation company. As a result, you don’t have to bear the hassles of multiple payment dates now!
3. Reduction of your overall interest rate
You might know that pdl lenders offer loans at a very high APR! This makes pdls more burdensome. But, what if you get a chance to pay off your pdls at a much lower interest rate?
Well, don’t get surprised! The consolidation company will try to negotiate with your creditors to reduce the interest rates of your pdls. As a result, opting for a pdl consolidation program will help you save on the incurred interest too!
Let me reiterate that a payday loan consolidation company will provide you with these services by levying a certain professional charge!
4. Cessation of collection calls
Your creditors won’t waste a single second to extract money you owe! They will try to withdraw money from your bank account if you have given access to.
But they won’t stop here. They will start calling you, sending letters from lawyers to squeeze out the money.
When you opt for a pdl consolidation program, you start paying off your payday loans every month through the consolidation company. As your creditors get regular monthly payments, they usually stop calling and harassing you.
5. It might save you from wage garnishment!
While taking out a pdl, you should read the terms and conditions of the same very carefully! The creditors will make sure about the recovery of the loan amount, in case you fail to pay off.
Usually, pdl creditors go either for wage assignment or wage garnishment when you fail to pay a debt obligation. Most of the times, unknowingly you might sign up for voluntary wage assignments as it may be included in your loan agreement. You won’t be able to know it if you don’t read the terms and conditions carefully.
A wage assignment is a simple process where you voluntarily give a part of your paycheck to pay off your pdls. You can revoke your wage assignment whenever you feel like.
On the other hand, if you fail to pay off your pdls within a certain time period, your creditors can sue you in court. In case your creditors win, the court might give an order for your wage garnishment!
The court will direct your employer to garnish a part of your paycheck (limited to 25%) to your creditors. However, wage garnishment is the ultimate step, the creditors usually opt for, when you fail to pay off your debts.
So, to avoid these kinds of discrepancies, you can opt for pdl consolidation for a reliable and trouble-free method to pay off your debts.
6. Save more while consolidating your pdls
Well, if you want to dodge the service charges of a pdl consolidation company, you can opt for a consolidation loan!
It is basically a new loan with which you pay off your pdls at a much lower interest rate. Usually, the interest rate depends on your creditworthiness. Still, it’s much less than the APRs of pdls, most of the time. This way, a consolidation loan helps you to save more on the interest payments!
But, make sure to choose an apt consolidation loan for you by checking out the interest rate, origination fees, early payoff fees, etc.
7. Might fall into the debt trap again
Do you know that most of the pdl borrowers are living paycheck to paycheck? The reason is, they can’t manage and control the money they have and to pay off a single debt they end up taking out several loans.
Taking out a pdl means you are receiving quick money on your hand! This makes you vulnerable to overspending and unnecessary expenses. But, you need to control your finances to avoid falling into the debt trap!
To prevent that, the first and foremost thing would be planning a budget for yourself! This way, you can restrict your expenses for unnecessary stuff and make a habit of saving dollars.
If you strictly follow your budget, you won’t take much time to lead a frugal life ahead!
8. No need to stress anymore
Being trapped in debt makes you stressed and deprived of a good night’s sleep! But opting for a pdl consolidation program will relieve you from these kinds of problems.
A genuine payday loan consolidation company will guide you through the entire process of your debt repayment by chalking out the best plan for you!
9. Support from expert counselors or coterie
It’s rightly said that sharing problems can help you in finding the best solutions. You might hesitate in sharing your debt related problems with your friends and family. But you should learn how to stay motivated in the due course of your debt repayment.
While opting for a payday loan consolidation program, the counselors of the consolidation company might help you. Else you can find many support groups on the internet and people who have a goal of being debt-free like you!
10. Is consolidation an only option to pay off your pdls?
Sometimes, you might face a financial crunch if any emergency situation arises. Pdls might be very much appealing at this point of time because of fast cash loans.
But have you thought of alternate options of pdls?
You can take out loans from your retirement plans like 401(k) or traditional IRA or your life insurance policy.
But make sure you pay off these loans on time to claim the full benefits of your retirement plans or life insurance policy.
The bottom line is, everything depends on your ability to manage finances! You can avoid opting for loans by leading a thrifty life. Still, when you are taking out loans, especially pdls, you should be cautious enough to pay off your debts with your next paycheck and handling your dollars!
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