If you have a payday loan or multiple payday loans, then it may be worth it to find payday loan debt consolidation to where your payday loan or loans are paid off with another loan with a better interest rate and payment plan. This can also help improve your credit score.
1. Reasonable Interest Rates
One of the best reasons to seek out payday loan consolidation is that by converting your payday loans into another loan, you can typically have a much lower interest rate on your loan. Payday loans have extremely high-interest rates on their loans, even compared to credit cards, which can make climbing out of debt incredibly difficult. Most loans have much lower interest rates than payday loans, even if you have less-than-stellar credit or even a prior bankruptcy. Additionally, even if you have no problem paying off the payday loan, loan consolidation can still save you money by lowering your loan's interest rate.
2. Better Payment Plans
Another great reason to seek out debt consolidation if you have payday loans is that loans are usually made in such a way that you are able to pay them off without having to stop paying for utilities, food, or housing. Payday loans aren't set up to help you succeed in paying them or by considering your ability to pay them off with your expenses and your income. Additionally, debt consolidation can provide you with a better payment plan if your current payday loan requires a lump-sum payment, or if you struggle with organizing multiple payments to various lenders.
3. Improve Credit
Finally, one less-discussed benefit of a payday loan consolidation is that it can improve your credit score. Payday loans aren't usually reported to the credit agencies that create your credit score or report, but these loans being sent to collections are reported. By paying off these loans, defaulted on or otherwise, with another (better) loan, you will not only resolve the loans sent to collections but also be able to prove to future lenders that you can pay loans when they aren't designed to take as much money from you as they can. All of this can improve your credit score.
If you are interested in paying less in interest on your payday loans, having a more convenient payment plan, and improving your credit score over time, then contact a payday loan consolidation service near you. They can help you reduce the overall cost of your loan and make it easier to get out of debt by bundling it all together into one payment plan.