Payday loans, also known as cash advance loans, are designed to help borrowers with immediate financial needs between paychecks. Payday loans are typically targeted at consumers who require fast money without credit check. However, getting out of a payday loan quickly can be challenging, since they come with high-rate, triple-digit annual percent rate (APR) fees and short-term, short-payment terms. Payday loan consolidation then helps borrowers consolidate multiple high-interest payday loans into a single, low-interest loan, such as a payday loan or payday advance loan. See this – www.nationalpaydayrelief.com/payday-loan-consolidation/
What Everyone Must Know About Payday Loan Consolidation
Payday Loan Consolidation is an alternative to refinancing payday loans, because refinancing requires consumers to first obtain a conventional loan from another financial institution, such as a bank, and then refinance it with a payday loan consolidation company. However, borrowers who do not own a home or automobile are often unable to take out a conventional home equity loan or an automobile equity loan that would allow them to consolidate the amount owed on their payday loans. Payday Loan Consolidation, however, may be an appropriate solution for some borrowers. For example, if a borrower takes out two payday loans – one with a 30-day grace period and one requiring a minimal payment for two weeks – and fails to pay the loan on the second payday, he can consolidate the loans by taking out a loan with a one-day grace period and paying only the first installment, resulting in a smaller total payment every two weeks.
Payday Loan Consolidation can also help borrowers avoid frustrating, high-interest “pay day” lenders. Payday lenders commonly charge borrowers a fee of up to $50 dollars per month, and some lenders require applicants to provide extensive documentation about their current financial situation, including credit scores and employment histories. Some payday loan consolidation companies also require borrowers to provide a property address and phone number, and sometimes, these lenders require applicants to submit letters of recommendation from other current creditors. Payday consolidation services can be helpful in finding alternative financing options to cover unexpected short-term expenses, but borrowers should be careful not to get into debt for purposes unrelated to their emergency cash needs.
