Payday loans come with higher interest rates and shorter repayment times. It is also overwhelming to manage more than one loan at a time. However, consolidation can be the best choice. As all the loans will be merged under a new personal loan, you can pay off all the loans through one monthly installment.
By consolidating your payday loans, you can keep track of your financial expenses as it becomes easy to manage all your debts at a time. You can pay a smaller amount every month and get an extended time limit for the repayment. Moreover, it may help you get a loan from trustworthy lenders at a lower interest rate in the future.
You can consolidate your payday loans by the following steps:
Merge the loan balances
First, you need to merge the owed amount of your loan account for consolidating the debts. You must have at least $1,000 in payday debt for consolidation. though, the amount may differ depending on the platform you choose.
Compare different options and lenders
Once the loan balances have been merged for paying off the debts, you can look for other options to find out the most beneficial one. It is highly recommended that online lenders give you the maximum benefits, such as flexible repayment, competitive interest rates, and no hidden charges. Besides, banks may turn you away due to bad credit but the lenders will still give you the chance that you need.
Check if you qualify for a consolidation
If you are worried about the approval of your consolidation application, you can take a test. It's called pre-qualification which will let you know your eligibility status for consolidation based on the loan amount, interest rate, and repayment terms. Moreover, it will not harm your credit score.
Apply for a personal loan for consolidation
Next, you need to apply for a personal loan through online lending platforms, credit unions, or banks. You need to include your personal information along with some crucial documents like proof of identity, employment, and income.
Start repayment through the new loan account
Once you get approved for the loan, you can get into the last step. The lender will send you the agreement for the personal loan. Once you sign it, you will get some money for paying off your previous lenders separately. After that, you will start paying for the consolidating loans every month.
Conclusion
It is hard to pay off a payday loan in such a short time due to its high-interest rate. While consolidation is a one-stop solution for all the ongoing loan repayment. You just need to get a personal loan and it can reduce the stress of managing many loans together. Simplify finances with an easier repayment solution and save money for the future by consolidating your payday loans.