How to pay off multiple payday loans?
It can be done in various courses of action such as a line of credit, personal loans, and home equity loans, etc.
Not every time you have to think about loan consolidation but when you are endangered of debt cycle then this is the best choice to do.
You need to follow this process step-wise as the following:
- Firstly, you have to choose one way among several ones to combine your short-term loans which meet your requirements. As if you have a credit card then it would be the fastest way to consolidate but if no, then the quickest work can be done by personal loans. In contrast with this, home equity loans required security and long-term process but it’s very less expensive than former ones.
- Secondly, either you are eligible or not, you must find it out before opting for one. As such, it is totally depending upon criteria that how a lender will check but still you’ll get some rough idea though.
- Thirdly, the application will be filled and submitted in which you need to provide your identity proof along with information like Social Security Number, Address, Contact information and some information on earnings such as salary proof or employer information for verification.
- Next, it would take approximately 10 days to 30 days for the cash credited to your account (depending on the method you’ll choose), if approved.
- In the end, you can repay your loan via check or cash to your lender. In some cases, new creditors pay your debt to an old loan provider directly.
Then your new loan will be started and you’ll need to pay to your new lender with a lessen rate of interest. And this would be an installment loan which you’ll pay in a set of monthly deposits.
Now, you’ll know about online payday loan consolidate methods in detail:
- Credit card: If you already have a credit card then you can choose this option due to its faster service. But prior you must know that if your credit card provider allows this or not. Here you will transfer your loan to the card and then your lender will change. Now, you’ll need to repay your card provider with a much lesser interest rate as compare to open payday loans that are around 19%. And the funding of cash along with approval takes nearly 14 days to 24 days.
- Personal loan: As the name suggests, these loans are for your personal use that means you can use money at anything. Personal loans are basically of two types i.e. Secured and Unsecured. So, the APR varies to the type of personal loan. For a secured loan, you don’t worry about credit history but need something valuable as security where you’ll need to pay lower interest. But for unsecured loans, you’ll need to have more than 585 scores without any security. As you have to check that for which personal loan you are qualified then continue with your application. Following that, your lender will be changed if you get approval (which usually comes into 1 to 7 days) with the APR of 6% to 36% as per your choice of loan.
- Home equity loan: These loans are only secured ones where you need to put your home as a security and it’s a bit long process as compare to above two which takes practically a month. Similarly, like personal loans, you can use this cash wherever you want. Its APR is far less than personal loans and credit cards (4%-8%). While in case you get default by the payment then your house can be on risk.
- Home equity line of credit: HELOC is the loan where you can borrow money in small sets whenever you want. But else, it is similar to home equity loans along with its policies. It also requires credit sore more than 620 with 4%-8% APR. It takes around 1 month to get cash in your account.
Along with various following benefits, debt consolidation does well out of relief from so much stress of several loans. Have a look at some of the advantages of that:
- Convenient Payment: It provides you single monthly payment so that you don’t need to keep a record of several loans differently.
- No more access of lender to your account: As in payday loan you have to give access to your bank account to your lender but after combining the loan you don’t need to do so. Hence, you’ll then only one to keep the control.
- The decline rate of interest: When you’ll not have to pay a high interest that means you can save more. So, this is the chance to save money because your overall interest in various short-term loans would be fallen off.
- No more debt: Payday consolidation will prove a helping hand for you to get out of the debt. Here you’ll make your own plan to refund the money with full control.
- Less late charges: Fees for late payment is not so high, even in some cases there are no charges of paying your monthly installment after the due date. Otherwise, in open payday loans, the charges are very high.
- Set-aside money: You can easily save money because of lesser APR and negligible charges of late payment.
- Surpass credit rating: It can also be helpful to improve scores of credits which can give you more ways in the future in case of loans. But only if you pay your monthly installments on time.
You must choose debt combining the company intelligently by asking about the reference from your known ones. Check if that company has good reviews and ratings. And you must be aware that it should not take any advance fees from you.