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Payday Loan Consolidation

Debt consolidation is a service offered by Loan Relief Service providers to facilitate debt refinancing by taking out on loan from the consolidator and using it to pay off multiple loans owed to other debtors. Debt Consolidation is a relief to personal finance because it allows you to pay off many debts simultaneously using one loan with low interest rate. It also relieves you of the nagging telephone calls by lenders among other advantages as we’ll see on this well-researched insightful post.

A payday loan is a loan that is given to pay off all your debts. Owing one source of money sounds great but, it can be a horrible mistake if you are not careful.
Certain companies will entice you with this offer and, destroy you with the interest rate. If you have fallen into this trap don't despair, there is still hope.
There are people dedicated to righting this injustice. It doesn't matter how you got into this mess payday loan help can get you out of it.

What Exactly is a Payday Loan?

Payday loans are short-term loans given as an advance on your future paycheck and are available in just about every single state in the US. In many cases, they’re approved with the applicant only having to fulfill a few minor requirements, such as proof of employment or fixed income, and an open checking account. Upon approval, the loan funds are paid either by check or cash and often simply deposited directly into the customer’s checking account.

There’s always a catch, however, and it comes with the egregious terms of the loan. They can include a high-interest rate as well as confusing compounding frequency, and an overly aggressive payment schedule.

For example, the exorbitant interest rates are often many times greater than even the most high-interest credit cards. Many credit cards have interest rates of 25, 28, and in some cases, even as much as 35 percent. But, 36 percent is the highest interest rate allowed under Federal and state usury laws that go all the way back to the early 20th century.

The fact is that interest is a percentage that you pay a lender for a loan, however, usury is the practice of charging borrowers excessive and unfair interest rates. Usury is a scourge on the financial services industry and its customers. Unfortunately, it’s also a reality in this day and age that has a stranglehold on many borrowers’ lives.

Payday loans can come with “interest rates” of 400 percent APR or even higher! So, how do PDL companies get around the usury laws? In general, they often call the interest charge a “fee” in the loan agreement rather than calling it “interest”.

There are now 20,000+ payday lenders in the US and payday loans usually have a very short repayment period, which makes it almost impossible for borrowers to come up with additional cash for repaying their loans on time. Consequently, many of them end up repaying the initial loan and taking out a new loan (or paying only the interest/fees due in states where it’s allowed) over and over to help them stay afloat. That’s why they call payday loans “the treadmill of debt”.

If you find yourself stuck on that treadmill, then payday loan relief could be a big help.

Why Are Payday Loans So Dangerous?

The biggest and ever-present danger with payday loans is that they almost always make any borrower’s financial situation worse instead of better. As a matter of fact, they’re so dangerous that, in many states all over our country, they’re categorized as ‘predatory lending’ programs. They’re literally designed to prey on people in need, taking advantage of their vulnerability to literally trap them in a vicious cycle of endless fees, high interest, and expensive defaults.

 

In addition, many payday lenders require permission for debit access to a borrower’s checking account so that they can take their money out in the face of any default. They frequently do this by requiring either a check or an ACH authorization as part of the terms for loan approval. This can lead to surprise debits to a borrower’s bank account and subsequently even more financial problems.

 

However, a borrower can issue a cease and desist/revocation of permission by mail or email to a payday lender, and legally, they have to stop debiting your account. That’s the good news. The bad news is that it often prompts lenders to escalate their efforts to collect. This can include more aggressive collection calls and more piles of mail demanding payment. And, to make matters worse, those collection efforts can often be followed by a lawsuit. Once a payday loan gets to that point, things can really get messy and extremely expensive.

 

With those sky-high interest rates (approximately 400 percent), being late by even just one day on your payment can easily be just the beginning of a dangerous cycle of late fees, especially when some loans are calculated daily. Unfortunately, that means borrowers who are already cash-poor are then shoved into a financial situation that’s even worse as they desperately try to keep their heads above water on a loan that was supposed to help them by covering their emergency needs. What looked like a life preserver turns out to be a deadly financial trap

Payday Loans Are Attractive & Difficult To Quit

Payday loans are preferred by many people because they are convenient—easy to access on short notice. They are most appropriate when you get an emergency which requires money to solve. Since you had not planned for it, you will need some quick cash if you don’t have any cash in hand or if you have some little cash with you which are not enough. Obviously, payday loans will be the most attractive option in that case, for many Americans. Generally, here are some reasons why payday loans are attractive;

No credit check involved before the loan is approved

This makes application of payday loans easier and faster also an advantage to people with bad credit history because payday loan lenders don’t follow up on credits.

No restrictions on when to apply for a payday loan

You can apply for these loans any day and at any time you want to, this makes payday loans more convenient than many loan options thus very attractive.

Self-consciousness

Many people love payday loans due to self-consciousness; you know that uncomfortable feeling which comes with borrowing from family or friends? Payday loans don’t come with that much shame.

Convenient for emergencies

Payday loans are remedies for emergencies because they are easy to apply and sanctioned fast among other features.

Is Consolidating Your Payday Loans A Good Idea?

If you’re skeptical about Payday Loan Consolidation, you shouldn’t be anymore. If your payday loans are building up fast and starting to take a toll on your budget, consolidating the payday loans is the best way to repay them off. Don’t spend another minute wondering whether consolidating the payday loans is a good idea. Instead, spend the time on finding loan consolidation companies which offer Payday Loan Help services.  They will find ways to convince your lender to reduce the interest rates on your payday loans, take care of charges and fees associated with your loans and eventually transform your payday loans into one debt payable in monthly installments. Besides, they give you sufficient time to pay off the loan.

The average American debt is daunting enough, you don’t have to face payday loan interest alone.

The reason so many people are in debt is that it takes expertise and experience to pay off extreme debt. Payday loans are even worse than the common financial crisis everyone seems to, unfortunately, experience. The interest rate on payday loans is criminal and, you need payday loan help. The secret to getting out of debt, any form of debt, is professional help. There are practices, and studies surrounding this whole dilemma and we are willing to provide all of these necessities to you for payday loan help.

The CAW Payday FAQ

Payday Loan Consolidation: Multiple debts that are owed and need to be paid off in a large sum and breaking into smaller payments until pay off. Payday Loan Settlement: reducing a large amount of debt by negotiating a reasonable repayment plan and is mutually agreed by both parties.
The Difference between Payday Loan Consolidation and Payday Loan Debt Settlement is that Consolidation will combine everything into one large bill. It can be at once or in multiple installments until it’s paid off. Debt settlement tends to be smaller than the outstanding balance that is typically owed. This can be paid all at once or smaller payment plans as well. Also, when it comes to consolidation, the credit score can improve, meanwhile, settlement can do a little more damage. But, it will be improved later on once it’s been paid off. The settlement route tends to be the least favorite, due to the fact that the collection company wants all of the money, instead of settling for least.
How Does Payday Loan Consolidation Affect My Credit by having this temporary tough situation. Any person’s credit will go down when any charges haven’t been paid. Especially late payments. However, any person’s credit can and will go up when the payments are complete. Things can turn around because the loan can be a booster when a person makes continuous payments on the loan on time and when completed. Also, this will show that the person is responsible by paying bills on time and balances are in the positive.
Does Payday Loan Consolidation Lower Debt Amount & Interest Rates: No and Yes. No, the debt amount can’t be lower because any outstanding balances won’t be lower through the consolidation route. Due to fact any outstanding balance will be combined as one. The person can do a one time payment or smaller payments. Yes, the interest rates can be lower because finding the “best deals” on interest rates is one of the top priorities.
No. When a person goes through the consolidation process, all the debts are combined as one til is paid off in single or multiple installments payments. The paying of taxes applies for the debt settlement route because the amount owed was significantly reduced. The client will receive a tax form (1099-C) and the amount has to be more than $600. Also, clients will have to take this seriously or can face one of these options: fines, penalties, or an audit. However, each debt will be handled differently because there are several debts that can be taxed exempt.

Logically, it is better to go the Debt Consolidation or Debt Settlement route because there will be fewer side effects for the client. Bankruptcy route will always be an option for anyone as well. With the Debt Consolidation, it will be an All-In-One monthly bill cycle (or one time payment of pay in full). Eventually it will be paid off, and the credit score can increase with time and a lower interest rate. Also, the Debt Settlement is similar to the Debt Consolidation because it will eventually be paid off as well. The Debt Settlement will be a lesser-owed debt that was mutually agreed upon by all the parties that were involved. Credit score will go up as well.

 

Bankruptcy : As for the Bankruptcy, there are about 6 different chapters a person falls under. In addition, each chapter has different effects and how long it will stay on the credit reports. For Instance, Chapter 7 bankruptcy will stay for 10 years, meanwhile, Chapter 13 will stay for 6-7 years. Throughout those years, it will be challenging for a person to get a job, get loans such as a home or car, and etc. Added stress and possible mental issues can develop because of being held back from moving forward in life and financially.

It can range from 10%-75% reduction. In addition, it varies with each client and what problem he or she has. The power of negotiation will be the key to getting debt to decrease to a reasonable amount.
This is defined by case-by-case situations. Due to the fact that each client has different debt problems. Also, how dedicated will any client be willing to pay off the debt. However, it should take less than 5 years to be paid off on average.

There are four different types of debt relief services that Consumer Awareness Weekly can help clients with, which are:

 

  • Option 1: Payday Loan Consolidation
  • Option 2: Payday Loan Debt Settlement
  • Option 3: Credit Card Debt Settlement
  • Option 4: Filing For Bankruptcy

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