Payday installment loans are a great help in times of urgent need. They are good sources of instant cash and can be paid off with your next paycheck. These loans are very useful in paying urgent medical expenses, huge car repair costs, or even household bills. Truly, payday installment loans serve as a handy way to get cash in tough financial times.
However, these are expensive and come with costly fees. If unpaid on the scheduled due date, lenders can offer extensions but with additional charges. If left unpaid over time, late fees accumulate making your debt increase even more. As a result, many consumers find it hard to get out of debt.
If you are stuck up with your payday installment loan debt and cannot get out of your debt problems, then you need to consider a debt consolidation option. With debt consolidation, you can get help negotiating lower interest rates on your payday installment loan debt and combine multiple loan payments into a single monthly payment. With debt consolidation, you gain better control of your debts and help yourself get out of debt faster.
So how does debt consolidation work? There are specialized debt management companies that will help you pay off your payday installment loan debt through debt relief loan programs. These companies contact your lender(s) and try to convince them to agree upon a consolidated repayment amount that will help you pay off your loan easily. In debt consolidation, the consolidated loan amount is calculated at a lower interest rate to give you lower monthly payments.
If you are considering debt consolidation to pay off your payday installment loans, you have two options. One is to do it yourself by merging all your outstanding dues into one big loan or you can work with a debt consolidation company who will act as a mediator between you and your lenders. Both are good but there are some pitfalls.
When you do debt consolidation yourself, you can save money. However, most lenders will not work with you directly. They need some guarantee that you can really pay the outstanding loan. So if your debt problems are quite unmanageable, consider signing up with a debt consolidation company.
Debt consolidation companies can talk with your lenders and convince them to reduce interest rates and waive penalty charges. They can even negotiate merging all your loans into a single consolidated monthly payment. You make the payment to the company and they in turn disburse the money to your lender or lenders.
The services of debt consolidation companies charge a fee, usually a certain percentage of the total outstanding debt they are managing for you. Some companies may also charge a flat fee. However, they are not to charge you an upfront fee unless they have negotiated your loans with your lenders.
Keep in mind that when you consider getting the services of debt consolidation companies, they can really help you get out of debt and not put you in more. Take into consideration the affordability of the total monthly payment you have to make, the number of installments (in months), and how much you are paying for the services of the debt consolidation company you are dealing with. Be sure to read the fine print of your contract with them. And most of all, do not sign up with a company that is not registered with the Better Business Bureau (BBB).