In a financial pinch, payday loans may be necessary to keep bill payments up to date. However, situations such as job loss, illness and other unforeseen circumstances arise when it is difficult to pay back those loans. If you find yourself in this predicament, it is possible to consolidate loans into a single monthly payment.

Acquire a Loan

Before getting a consolidation loan, calculate the amount of debt you owe. Tally up all of your payday loans and get an exact sum total before applying for a loan. The more money you owe, the more likely you are to get a consolidation loan. When searching for a loan, of course you want to find the one with the lowest interest rate. If you own a home, you may want to obtain a secured loan using your house as collateral. With home ownership, a lender will likely give you a better interest rate because the lender knows there is a lot at stake if you do not pay it back. If you do not own a home or anything of value, your interest rate may be higher since you will likely get an unsecured loan. Your credit score plays a major factor in both interest rate and the ability to obtain an unsecured loan at all. If it is poor, you will either get a massive interest rate or the lender may choose not to lend you the money period.

Negotiation

Find a reputable debt consolidation company and discuss your finances with a counselor. She can determine, based on what you owe, your interest rates and what you are able to pay monthly, whether debt consolidation or debt settlement is right for you. With consolidation you pay back everything you owe in payments to a single company instead of payments to multiple debtors. Debt settlement is having your total debt negotiated to a reduced rate, usually 30 to 60 percent less than what you owe.

New Plan

After you have negotiated and an alternative payment plan is in place, begin to pay back those payday loans immediately. But this time you make a single payment instead of several. Often, late fees are reduced or completely eliminated and interest rates are lower than before. This helps to put you on the fast track to getting out from under that payday loan debt as quickly as possible. By consistently making payments on time, every time, you help to improve your credit score as well.

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Payday Loan Debt Consolidation

Payday Loan Consolidation Help