There is a life raft to hang on to! You just have to know where to look for it. The life raft is a program known as payday loan debt consolidation and it has helped thousands of Americans finally get rid of those pesky payday loans. Here’s a little information about how the process works:
- Discussion – When you initially sit down with your payday consolidation company they will require certain information from you in order to prepare your consolidation plan. This information can range from your income, to the names and addresses of your payday loan lenders, amounts of your debt, and list of your monthly expenses. Your income and expenses will determine how much each month you will be able to deposit into a new savings account specifically for your payday loan consolidation. You will not be required to deposit an amount you cannot afford.
Negotiation – Once the savings account set up for you has reached a certain balance your payday loan consolidation company will begin negotiating with your lenders to reduce the balances that you owe. The amount of the reduction will depend on how much you owe the lender as well as what the lender will agree to. Most lenders understand that a payment of some money is better than none at all. The negotiators at the company you have chosen will use the money you have saved to prove to the lenders that you will be able to pay back the loan.
- Consolidation – Once the negotiators and lenders have agreed upon an amount you will be contacted. The payday loan consolidation company will explain to you how much they reduced your debt and what it will take to pay it back. At this point, if you have more than one lender, the consolidation company will allow you to make 1 single payment per month, to them, and allow them to disburse it to the creditors as previously agreed. That way you only have to worry about mailing one payment per month, all the while knowing that your payday loans are on their way to zero.
- Payoff your balance – This is the basic thing to do to get out of payday loan debt. However, this can be very difficult to do. The good thing is that you can clear your debt with dedication. You will need to adjust your lifestyle to leave more cash for your loan payments. First of all, you need to draw a budget and the budget should only include your necessities. You should do away with luxuries at this time. You should probably forget about those trips to luxurious restaurants and start taking homemade food more. You should also reduce the rate at which you shop. Avoid impulse shopping as much as possible. You can control the rate at which you shop by carrying as little cash as possible. If you do not have enough cash on you, you cannot purchase anything you have not planned for. You should probably leave your credit cards at home as well. It is easier to shop with credit cards and it does not even feel like you are spending money. It is an important reason why you should stop carrying your credit card around. Once you reduce your expenditure, you will be able to spare more cash to pay off your debts. Reducing your expenditure does not only spare you enough cash for your loan payments, but it also stops you from accumulating more debts. When you begin paying off your debts, pay off the high interest one first. Those ones are bound to accumulate a higher interest rate when you miss payments. The late fees are also high hence, you should consider paying off the high rate loans first.
- Request for an Extended Payment Plan – It is difficult to clear your payday loan debt because of the short repayment plan. You can restructure your payment plan to make it easier for you to do it. The extended payment plan will break your payments into manageable amounts to make it easier for you to pay. You will have more time to pay your loan and you will not need to worry about additional fees because you will not be asked to pay late fees. You will need to apply for the extended payment plan, and you need to apply latest by the last business before the due date. You will be asked to sign a new loan contract which will include the extended period. When you extend your loan payment period, remember to pay off the loan on schedule. You should be dedicated to the new schedule. To apply for an Extended Payment Plan, you will need to contact the lender the same way you did when you applied for the loan initially. You should note that you can apply for an Extended Payment Plan only once a year.
- Increase your income – Another thing to do is to increase your income. When you increase your income, you will have more cash to pay off your debt. It is easier to increase your income than you think. You can get a side job to help you achieve this. Look around to see if there is something you can do. If you love writing or even painting, you can try that as a freelancer. You can also consider other jobs such as walking a dog or babysitting. You can also begin to work overtime. If your company pays you for overtime, grab that opportunity. You can also request a salary increase. This does not work all the time but it is worth trying. Sometimes, your employer may not think about it until you actually ask. Your employer may consider it when you ask him or her. When you ask, be polite about it. You can politely give reasons why you deserve a pay rise. You should also start going through your things so that you can gather the things you no longer use. You can sell these things on eBay or other online marketplaces. That can fetch you some cash as well.
- Settlements – This is a bit risky but you can try it if you run out of options. With loan settlement, you will work with a loan settlement company to settle your debt. With this, you will need to stop making payments to your creditors. The settlement company will set up an account for you and you will be in control of the account. You and the company will decide on the amount you will deposit at the end of every month. When you deposit the cash into the account for some time, the settlement company will negotiate with the creditors for them to accept an amount that is lesser than what you actually owe. The creditors are usually motivated to accept a lesser amount because a lesser amount is better than nothing. Usually, when you stop making payments, the creditor may be worried that you will end up filing for bankruptcy. Once you file for bankruptcy, the creditor may not get anything. The risk involved in a settlement is that the late fees and interest rate will pile up. Sometimes, the lender may sell your account to a debt collection agency and they will be on your neck. It can be really uncomfortable when they call you often. Another disadvantage is that debt settlement does not work all the time. Sometimes the creditor may reject the proposal offered by the settlement company. When that happens, you will end up with a bigger debt than you had previously. There are creditors who are known to reject settlements hence you need to check if the creditor accepts settlements. Unfortunately, you cannot always predict the creditor’s decisions.
- File for bankruptcy – When you have completely exhausted all the means of clearing your debt, you can file for bankruptcy. Bankruptcy will help you to clear your debt but it will also reduce your credit score. Bankruptcy can also remain on your credit report for 7 years. Sometimes it stays on your report for 10 years. When you file for bankruptcy, some of your assets will be liquidated to pay off the lenders.
With the interest and penalties that come with missing a payday loan payment it is easy to understand how they can quickly become overwhelming, but don’t let payday loan debt keep you under water any longer. There is a way out. A payday loan consolidation can have you back on your feet in no time. Fill out our no obligation form or call our toll free number today!