Payday loans are becoming an increasingly popular form of borrowing. In difficulties, they are a great solution because we can get them in an instant. An organization that provides payday loans rarely requires us to do more than just ID. So nothing could be simpler than to do it in a few minutes. These great products exist to save us in many unexpected situations and help us avoid financial problems.
The main thing, when choosing this type of loan, is to carefully study the reviews of credit institutions and their conditions. The more famous a company is, the more reviews you will find on the Internet.
What To Expect From Payday Loans?
One major downside to payday loans is that they have to be repaid. This usually needs to be done fairly quickly as they are usually provided for periods ranging from 3 to 60 days maximum.
Many of us have forgotten that each subsequent loan amount is also an additional monthly payment. We spend the borrowed funds quickly and the value of our monthly commitments increases. How to deal with this situation and protect yourself from serious financial problems? A consolidation loan comes to the rescue to pay off payday loans. You can also read the information on how to get secured loan approval without a credit check here at DirectLoanTransfer.
Ready consolidation means that we take out a new loan. A payday loan has slightly different rules. With his help, we pay off all of our obligations, in this case the payday loans. In return, we only have one loan and one payment. This will allow us to be serene about the next monthly payments.
The contribution of the new commitment is less than the amount we have spent on payments so far. All you have to do is extend the funding period. The repayment amount will be spread over several months, making individual payments smaller, less expensive and less stressful. Consolidation loans have the same laws.
What Do You Need To Do To Get A Consolidated Loan?
First of all, you need to contact the company that provides these loans. Contact the branch directly or apply online. We will need ID and proof of our monthly income. Unfortunately, it will not be possible to consolidate payday loans with no source of income. This is not a typical salary that must be repaid in full after 30 days.
A consolidation loan can be up to an amount with a term of several years. If we don’t have a source of income, we have to look for other solutions.
Is It Worth Consolidating Payday Loans?
It depends on the company we choose and our current situation. Some consolidation offers are not very profitable. However, they are the only way to save you when we are drowning in debt. All in all, the consolidation of payday loans is a very good solution. We have a payout amount and a due date. The situation becomes more transparent, easier to manage, and the stress associated with debt is reduced.
To get out of the debt hole, you also need to make another important decision. The consolidation loan should be our last loan. If we keep paying payday loans, debt consolidation will not help us. So instead of decreasing our debt will increase and our desperate situation will worsen.
Consolidating payday loans at a bank is cheaper than at credit companies or parabanks. But this requires that customers have sufficient creditworthiness. In contrast, companies in the non-banking sector agree to bundle payday loans even if the applicant already has a debt registered with the BIK. The risk of non-repayment in this situation is higher, so the client should take into account the higher commission for initiating and servicing the consolidation loan.
How it works?
Payday loan consolidation is a financial service that combines several short-term loans into one financial service. Under the new agreement, the bank or credit company gives a customer a loan in an amount sufficient to repay current debts.
Online access to financial services is growing. Customers can easily take out a loan online. In the case of credit companies, the entire process is carried out without the need to contact a service employee directly. The applicant sends the data and scans the required documents via a virtual form on the website of the credit company.
Benefits of loan consolidation
The repayment terms are restored as part of the consolidation. Thus, the applicant can renegotiate the repayment terms and thus:
extend maturity (maturity can be extended up to several years);
reduce the monthly payment (extending the maturity is a good opportunity to reduce the monthly payment). The amount is spread over several months which means that the contribution is reduced;
receive additional funds (if the client’s creditworthiness permits).
When consolidating payday loans, clients can increase the total amount of the obligation and receive additional funds. However, the borrower should be aware that this is how he increases a debt. So, before using this solution, you should carefully consider whether you can afford it.