Payday loans are the need of the hour for many US citizens. Payday loans may seem like a quick and easy solution if one needs fast cash! The structure is such that many borrowers get stuck in a cycle of repeatedly ending up paying additional fees to renew the same loan!
If one gets stuck in the payday loan cycle, consolidating the debt into a personal loan may help break free.
The payday loan debt relief process works as explained below:
How a personal loan is the best solution:
The minimum loan amounts plan:
Loan amounts always vary by lender. The minimum loan amount for a personal loan is usually about $1,500, which is always higher than the minimum amount for a payday loan! The best way possible is to repay the payday loan debt relief earlier and qualify for the next stage of borrowing another loan.
Checking one’s credit scores:
Unsecured personal loans are grant based on an applicant’s creditworthiness. The lenders will perform a credit check before deciding how much amount needs to be disbursed. If one does not qualify for an unsecured loan, then the borrower can go for a secured personal loan.
Proving ability to repay the loan:
The payday loans debt require a checking account and a pay check that’s all! But, most financial institutions require proof that one can repay the loan on time. If one’s income is too low, or the debt is too high, then the person will not qualify.
The debt relief options:
Extended repayment period:
Most of the states allow borrowers to extend the repayment period past their next pay check and repay the loan in smaller installments. One can ask the payday lender if the option is available. But, the incumbent has to pay an additional fee!
Need to work with credit-counselling service:
Credit counselors are there to help consumers with all the aspects available to manage their financial debts. That includes budgeting, debt management, and consolidation programs! They help in examining the debt problems and how to provide relief. One should choose a credit counselor from a reputed organization. The Federal Trade Commission recommends working with someone who offers in-person counseling at any given time! This way the borrower will get some relief and can work towards paying back his payday debt in record time! This way the borrower will be able to avoid penalties and additional fees!
Seeking legal help from attorneys:
The legal attorneys provide free legal help, but only to low-income individuals. If one qualifies, then they will work with the borrower. These legal attorneys help them understand the debt-settlement rights and will work towards giving them all legal options available based on the person’s agony.
The available bottom line:
The best way possible is to consolidate one’s payday loans debt into a personal loan that helps in repaying the loan in the best manner! The borrower needs o qualify for the same. Many financial institutions weigh the pros and cons of a particular financial situation with favorable interest rate and provide a debt-relief option.