Payday Loan Consolidation Benefits

If you have fallen into a payday loan debt trap, there are not many things you can do to get out of it. However, payday loan consolidation is an option. We have prepared a list of its advantages which may work for you. You may most probably like to consider using payday loan consolidation if you are eligible for a debt consolidation loan. It is probably what you need to take out if you have a lot of payday loans debt.

Payday Loan Consolidation Benefits:

1.   Reduces stress
Reduces stress

Reduces stress

It is a good solution to a long lasting problem. Payday consolidation loan is a known stress relief tool that has an almost immediate effect. You may not always notice it but constantly worrying about your upcoming payments makes you anxious. It may affect your personal relationships since being stressed affects the way you treat your loved ones. In addition, it can negatively undermine your performance at work. A workplace is normally a stressful enough environment. When you get the extra stress of having to deal with numerous debts, it is close to becoming unbearable. That is really unnecessary when you can easily get all this negativity removed from your life. You should consider taking out a debt consolidation loan and you will see the change in your day-to-day life.

2.   It is easy to achieve
It is easy to achieve

It is easy to achieve

Payday loan consolidation works in a simple way. All you need to do is take out a debt consolidation loan. It serves to pay off all your accounts with creditors or in other words, it is used to consolidate all your previous payday loans which you can’t repay. A debt consolidation loan can be used for other kinds of debt as well. Payday consolidation is still the thing you should do, even if you have a bad balance on one or more of your credit cards. That way you will repay the multiple debts and the only thing you have to manage is the debt consolidation loan. Although it is better not to owe anything, it is still a much better option to have just one debt than have several of them.

There is one major benefit of having a single debt. There is just one deadline, a single creditor and most importantly, a single monthly payment. You do not have to receive multiple calls from various creditors anymore and do not have to pay a different debt every day of the week.

Apart from worrying less and being tormented less by creditors, it actually becomes easier for you to repay this one payday consolidation loan. Why is that? It is because now you can focus on it. You can plan your budget as you know all debt payments ahead. On top of that, your monthly payments that are due may actually be much smaller since you may have a longer time to fully repay the debt consolidation loan.

3.   It is useful and strategic to lower your interest rates
It is useful & strategic to lower your interest rates

It is useful & strategic to lower your interest rates

It is one of the best things about payday consolidation loan – it can actually save you money. How does it work? Because you do not have multiple debts after you have taken a payday consolidation debt, there is only one interest rate now and that would be your payday consolidation debt interest rate.What you win by getting a payday debt consolidation loan is a more reasonable, lower interest amount. That not only save you money on your monthly payments but also throughout the whole duration of the loan. Besides saving from a lower interest rate, you also need to get strategic with your finances. It is very important to plan ahead. Being prepared with a solution is always a good idea.

4.   It stops calls from debt collectors
stops calls from debt collectors

stops calls from debt collectors

A debt collector is probably everybody’s nightmare. It is definitely the last thing you want in your life. If you did not manage to repay what you owe within 180 days from the original deadline,  you creditor will turn your account to a collection agency. That is when hell begins for you. You will be receiving multiple e-mails and letters and daily calls even at work and calls at night. A payday loan consolidation could be your solution to end all those harrassement. Take out a single loan to repay all those outstanding balances.

Tip: Check out what state regulations are imposed on debt collectors and make sure you know your own rights. Their actions are regulated by the Federal Trade Commission (FTC). There is a Fair Debt Collection Practice Act (FDCPA). It covers certain kinds of debt such as family debt, personal and even household debt. In some cases, creditors may be forbidden to call you between 10 p.m. and 8 a.m.

That will definitely help you get some much needed  sleep at night. Another thing is that debt collectors may even be forbidden to call you at work if they know that it causes problems at work and your boss opposes it. Make sure you do not give up too easily and do not make yourself an easy victim. The federal regulations apply to everyone, regardless whether it is a debt collection agency, a lawyer who provides such a service on a regular basis or the notorious companies out there that go and buy delinquent debt. Harassment (whether verbal or physical) and false statements are strictly forbidden.

5.   It improves your credit score
 It improves your credit score

It improves your credit score

We all know how important credit score is and how hard it is to maintain a good one. There are just so many things that can have a bad effect on it. Having unpaid debt is one of them. That is especially true when you make late payments. Having multiple debts makes the situation worse. You may wonder what payday loan consolidation has to do with it. Well, a lot. The more debts you have, the easier it is for you to fall behind on some payments. That goes immediately on your credit score (and stays there for about seven years).

Then your credit score gets worse and worse every month. There is a very simple fix to the problem – take out a payday consolidation loan, repay all your other debts and have them marked as paid. That improves your credit score. You also need to stay on top of your payday consolidation loan payments. Through taking a payday consolidation loan you can rebuild your credit score over time.

In a nutshell, a payday consolidation loan could help you in many ways. Not only will it help you reduce the stress levels in your life and improve your personal relations, it will also make it easier for you to stay on top of your single monthly payment. In addition to all of that, it will get you rid of debt collector’s calls and help you maintain a good credit score.If you are dealing with multiple debts and are finding it difficult to deal with the situation, payday loan consolidation may just be the answer to end your troubles.

Differences between secured and unsecured personal loans

It is normal that at  some point in life you need a little financial assistance. A loan is a certain amount of money that is extended by an individual or an entity to another individual or entity at an agreed interest rate and repayment period. Whichever type of personal loans you are going to get, it is of utmost importance to consider interest rates, fees and charges. Choose a loan that suits your financial situation and meets your needs.

Personal Loans

Personal Loans

A personal loan will surely tide over most individuals in financial difficulties. Personal loans are generally for individuals and they include mortgages, equity lines of credit, installment loans and payday loans. Personal loans are taken out to meet unplanned expenses which could range from car repairs, medical bills, debt consolidation and other personal needs.

People struggling in a financial crisis opt for personal loans due to their various benefits for borrowers. Personal loans are personal gives the borrower the liberty of using these loans to finance several of their needs. Personal loans are easy to secure as their requirements are easy to meet. With personal loans, you do not wake up to hiked interest rates every dawn since personal loan rates are fixed from the moment of borrowing to the time of making your repayments. The interest rates of personal loans are comparatively lower compared to those of other forms of borrowing such as credit cards.

For individuals who have a dark past in borrowing such that their credit score is low can still qualify for personal loan for bad credit. This type of personal loan is independent of the borrower’s credit score.

When applying for a personal loan, you need to be on the lookout for scam lenders who are out to take advantage of vulnerable, unsuspecting individuals who are desperately in need of cash. It is imperative to be cautious and thorough when reviewing lenders and their loan terms. You should be dealing with a legitimate lender. Common scams in personal loans take the form of the following:

scams in personal loans

scams in personal loans

  •  Advance payment feesthe lender asks for a document fee, application fee or an insurance fee to process your loan. Legitimate lenders do not ask for money before giving you a loan. Usually, the fees are incorporated in the total cost of the loan.
  • Hiked up interest rates: Rogue lenders are known to inflate their interest rates or stretching the repayment schedule so that it extends for a few years. These two aspects result in an increase in the total cost of money of borrowing. It is, therefore, advisable that those taking out a personal loan to seek the help of a personal loan calculator. It uses the amount of money borrowed together with your credit score and repayment period to determine the interest rate to be charged on the loan. Avoid a lender that quotes a rate higher than what you are supposed to be paying.
  •  Copycat companies: Most fraud cases happen online. It is therefore of utmost importance that you do your homework thoroughly by verifying the business name and address before signing on with the company. Reading the company’s loan terms and conditions to ensure they suit your needs is also imperative.

Personal loans are either of a secured or unsecured nature. It is important to note the clear cut differences between these two types as it may influence your decision on which type of loan to take on

Secured loans
Secured loans

Secured loans

Secured loans are loans that require you to put up property as collateral for the loan, such that in the event that you default payment, the lender keeps the property. You will need to pledge some of your property such as your house or vehicle to back the personal loan. With a secured personal loan, the interest rate charged on the borrower is comparatively lower than that of a borrower taking out an unsecured loan. This is because, in secured personal loans, the lender’s risk of the borrower defaulting in payment is reduced. Most lenders of secured personal loans do not perform credit checks as they come with collateral. The main disadvantage of secured personal loans is that the borrower is at risk of losing property in case he is unable to make payments.

Unsecured payments

Unsecured personal loans do not require you to put up property as collateral, this type of personal loan is a great relief to borrowers who do not have property to pledge as collateral. With an unsecured loan, however, the borrower incurs high- interest rates. This is linked to the risk that the lender faces in the event that the borrower defaults in making payments. The fees charged are also comparatively higher than those in a secured loan. The loan limits an unsecured loan are low as the lender fears to extend large amounts of the loan to borrowers.

Eligibility for personal loans
Eligibility for personal loans

Eligibility for personal loans

Qualifying for a secured personal loan is quite easy. The major prerequisite for this type of loan is collateral, other factors such as minimum age of 18 of years and having an active account are also important.

In an unsecured personal loan, you have to convince the lender that you are in a position to make payments. That’s why you are required to provide proof of income by presenting pay slips, proof of identity by presenting a passport and government Id. You should also have active savings and checking account. Minimum age of 18 years or older is also crucial.