How to consolidate payday loans and get out of debt
How do you consolidate payday loans?
Debt consolidation is applicable mostly to internet payday loans (pdls). Here's a step-by-step approach on how to consolidate payday loans held by your creditors.
- Calculate debt amount. Find out the outstanding balance on your payday loans and other unsecured debts (if any) using the Unsecured Loan Calculator .
The debt counselor will analyze your current financial situation and suggest whether you should go for debt consolidation program or debt settlement .
Should you consolidate payday loans sent to collections?
If your internet payday loans are sent for collections and the collection agency (CA) calls you for repayment, here's what you should do:
should be done with the collection agency and not the original creditor as because he doesn't hold the debt any longer.
Once the SOL expires, the collection agency cannot win a judgment against you even if you do not pay off the outstanding debt. But this doesn't mean you don't owe the debt. The collection agency may try out means to collect it from you. You may send them a cease and desist letter asking them to stop any communication with you. Or else, you may pay off (consolidate payday loans or settle the debt ) the unpaid debt and release your obligation. However, the SOL is restarted once you start making payments.
How do you benefit if you consolidate payday loans?
When you consolidate payday loans, you get benefits as in a debt consolidation program. Lower interest payments, reduced late fees and fewer payments instead of multiple bills are some of the advantages. For more details, check out the 8 benefits of debt consolidation .
Are loans available for consolidation?
There are lenders who offer debt consolidation loan to help you consolidate payday loans. But whether or not you can use it depends upon the payday loan balance you owe. Say if your debt amount is around $2500, you won't get a consolidation loan. Such loans are applicable to higher amount of outstanding debt.
When should you go for Extended Payment Plan?
If you've been dealing with storefront payday loans, there's the option to get an installment repayment plan or Extended Payment Plan (EPP) from the lender as per payday loan laws .
However, the repayment plan applies only to 8 states such as Alaska. Alabama. Florida. Illinois. Michigan. Nevada. Oklahoma and Washington. The plan is offered by lenders when an account reaches the maximum number of rollovers allowed by the law and the debtor declares that he's unable to continue with the payments.
In states, where the EPP does not apply to storefront payday advances, you can either consolidate payday loans or follow the steps to do it yourself debt management depending upon which is easier for you.
"Last updated on May 29, 2013"Source: www.debtconsolidationcare.com