It can so often happen that we need cash very urgently to meet our financial needs and can’t be bothered with the tedious process of documenting and filing for another loan. For many people, the best option in this scenario seems to be a payday loan, a loan that offers instant cash or money in a short duration.
The downsides, though, are quite enormous. These loans require you to pay back the given amount within one or two weeks, and you can find yourself charged with a sky-high interest rate. Now to pay this loan off, you are forced to seek another loan of the same sort, which captures you in a vicious circle of paying and repaying until the interest monster depletes all your finances.
A simple solution to avoid this vortex from occurring in the first place is payday loan consolidation which can provide a seamless solution to clear off all the pre-existing loans off the board. But how does it exactly work? Should you apply for it? We’ll answer the questions in detail below.
How does payday loan consolidation work?
Payday loan consolidation is nothing but taking another loan, most preferably a personal loan, to pay off your payday loan. This works out quite well since the prior loans charge a much lower interest rate than your payday loan. Also, the duration of the repayment is much, much longer, with durations ranging from 16 to 42 months varying on who your lender is. You dictate how the loan works and what the repayment should be.
Countless companies out there offer payday loan consolidation like Credit9. The process is straightforward. They find a good lender for you and tell you the rules of the loan and then you have the choice of choosing the lender’s loan offer or not. In case you do, you are required to be prepared to submit your loan application along with all your necessary documents.
Once that’s done and well, you are free to utilize the loan amount for paying off your pre-existing loans! You need to ensure that you are able to transact monthly payments according to the terms assigned to you until all of the loan is repaid in full along with interest.
Benefits of payday loan consolidation
1. Payments you can predict
Payday loans may charge any unbelievable interest they seem fit and you will be forced to pay it. With other loans offered by the consolidation, you avoid this hassle because their monthly payment amount is fixed and stays so until all the amount is received by them.
2. Drastically low-interest rate
Payday loans are free to charge boisterous interest rates that can hit triple digits. Compare that to what you are charged by other loans, which rarely exceeds the 30% category, and you have a clear winner.
3. Longer durations
You aren’t required by force to pay off the payments in a drastically short amount of time. The consolidation loans offer you the ability to pay the amount off in a period that can span from one to four years depending on how understanding your lender is.
We hope this article helped you understand how the whole thing works and if it did, please consider following our website for regular updates.