Debt Consolidation – A Hope for your Never Ending Debts
Context of Payday loan.
Payday loan can be helpful in a way that you immediately need the money but it is not the pay day yet. The process is that you the money that you want to receive will be automatically credited in your account and it usually takes two to three hours. This loan is against your next salary payment and has a higher interest rate due to the short duration and its quick accessibility. In order for you to be permitted to apply for a payday loan, you need to have a stable income salary.
What will be the problem?
The problem in payday loans is when you keep depending on cash advances and you will not realize how much advances have already piled up. There are only limited burdens your regular salary can take, before it happens that the total amount of cash loans you owe is more than the salary figure itself.
The lenders may allow up to two 30-day extensions in many cases. Any default on these payments or using these extensions will mean that your interest rates will go through the roof as they are already on a higher scale. At most times, it leads you to stressful harassments.
Payday loan alliance lenders.
You might have multiple lenders for your cash loans, which means two to four lenders to whom you owe money. All different loans were borrowed on different days and on different amounts. With this, you will be confused on what day and amount will you need not to forget and usually leads to missed payments.
An alliance offers a simple answer. One of the lender will talk to the other lenders to form a consolidation and that particular lender will offer you a loan with lower interest rate.
The particular lender will pay for all of your loans and you will need to pay only to him after that. Debt consolidation payday loans can be carried out through an unsecured debt consolidation or a secured debt consolidation. In a secured debt consolidation, you might have to put in some form of collateral like your home or some land. A lower interest rate will be given to you this type of consolidation. Giving you a lower interest should not be taken for granted because if you still fail to pay the debts you owe, your properties will be at stake.
In an unsecured loan there is no collateral. So, there is no chance of losing your home or any other thing you had put on the line. But instead, your interest rate is in a higher rate compared to the secured loan.
There would be chances that you will be drowned in your debts due to unwanted chances or unplanned happenings but there is still hope in applying for consolidation loans that may help you rise up again.
Attributed by: The Beginners Guide To Options (Chapter 1)