Consolidating Payday Loans

  Payday loans can be helpful when you are in a pinch but you can quickly get in over your head. Outrageous interest rates and regular fees contribute to the problem and, before you know it, you have taken out more money, are paying more fees and may even end up taking out multiple payday loans to help you stay afloat. Despite your best efforts, you can feel the ship sinking. You are drowning in payday loan debt. You don’t know what to do and you keep hoping for a way out. Relax! There are a few solutions. How Creativity Can Help You Get Out of Debt Unfortunately, there aren’t any payday loan consolidation companies. There are, however, some options for consolidating your payday loans; you just have to be creative. Think outside the box and try to come up with a way to pay off the loans in a way that will help you get your finances and your budget back on track. Tapped out for ideas? Try a few of the following. Secured Consolidation Loans If you have enough debt and decent enough credit, you might be able to take out a secured consolidation loan. While this really isn’t an answer to your problem, a secured consolidation loan is more favorable than continuing to pay outlandish interest rates and payday loan fees. Be aware, however, that you will have to place your home up for collateral to obtain a secured consolidation loan. Make your payments on time and learn how to more effectively budget your money. You may even want to work on starting up a savings plan so that you can avoid payday loans in the future. Unsecured Personal Loans Another option is an unsecured personal loan through your bank or another financial institution. While the interest rates are generally higher for unsecured loans than for secured loans, the interest rate should still be significantly lower than the rates on your payday loans. Plus, you don’t have to worry about putting your home up for collateral. Of course, don’t mistake this advantage for a reason to make your payments late. Late payments will still have a negative impact on your credit score. The biggest disadvantage to unsecured personal loans is that you do have to have pretty good credit to get approved. In most cases, a score below 720 will be denied. You may not have a credit score this high, making it necessary for you to choose a different option for paying off your payday loan debt. Zero Interest or Low Interest Credit Cards Another option is to apply for a zero interest or low interest credit card and place all of your payday loans on the credit card. This will allow you to pay off your payday loans and make payments to your credit card company without all of the continuing interest. Keep in mind, however, that zero or low interest credit cards are only offering you an introductory rate. If you don’t pay off the balance before then, you are likely to be right back in the same situation. Make good choices and pay as much as you can afford on the balance before time runs out. Private Lenders Private lenders are a little known secret that so few people ever even think about. Private lenders loan money to people, just like you, for a variety of reasons. While you will have to meet their terms and conditions and you will have to pay an interest rate, the terms, conditions and rates are usually much more favorable than the payday loan terms, conditions and rates. You can find private lenders in a variety of places. Family and Friends Have a family member or friend with a decent amount of money or good credit? Try to employ their help. Many family members and friends are helpful when it comes to getting out of debt trouble. They care about you and don’t want to see you struggling. Just be sure to put everything in writing, ask for a receipt and make your payment on time. This will help prevent problems between you and the lender and keep your relationship from going sour. You should also consider paying your friend or family member an interest rate on the loan. This will give them an incentive to lend you the money and it will help them feel good about helping you get out of debt. Again, just be sure to get everything in writing and make sure that the interest rate you agree on is fair. There are so many other options when it comes to paying off your payday loans. Sit, ponder and think; come up with something creative or simply use one of the ideas above. Whatever you decide, use good financial planning and budgeting in the future so you can avoid getting into the same situation in the future.