What to Watch for with Payday Loan Consolidation Programs
Are Payday Loan Consolidation Programs Right for You?
Once your loans start piling up, you may be overwhelmed by your payments. It is hard to keep track of five or six different bills when you already have your house, car, and insurance to worry about. Rather than missing payments left and right, you may want to consider loan consolidation programs. These can take your existing payday loans, home loans, car loans, and more and combine them into a single payment you can make every month. As convenient as they sound, consolidation is not for everyone. You need to figure out if this option will help your situation or hurt it even more. Let's do a quick assessment to decide if you should consolidate your loans.
How much do you have to consolidate?
If you only have a couple loans to consolidate, doing so probably isn't worth the hassle. You're going to have to go through a whole new lending process, and you'll probably be charged some fees along the way. In cases like this, it is often best to get all of the loan payments on the same date so you can treat them as a unit. Make sure every company gets their money, and you should be good to go.
How much will it cost to consolidate?
There is going to be some sort of fee associated with the consolidation process. The question is how high that fee is and what all it will entail. For instance, you may have to pay a balance transfer fee to cover the move from one lender to the next. This will be a percentage of the money coming into the new loan. You'll still end up with lower payments, but your overall debt will rise. You need to compare costs and decide if consolidating is a wise decision.
Will consolidation actually help?
You have to figure out if consolidating your loans is truly going to help your situation. It may if you have five or more loans with extremely high interest rates, but it probably won't if you have a couple loans on your name. You also have to think about whether or not you can handle paying on all of those loans at one time during the month. Your consolidated payment will be lower than your individual payments combined, but it still may not be feasible for you. You may be better off making your payments sporadically over time.
If Loan Consolidation Is Right for You
If loan consolidation becomes the perfect fit for your situation, start looking for a program you can count on. Get a lower interest rate and lower monthly payments so that you can keep up with your bills better. Make sure you include all of the loans you can into this one setup so that you don't have to reconsolidate in the future. Then all you have to worry about is paying off your new loan.
If Loan Consolidation Is NOT Right for You
If you find out that loan consolidation programs are not going to help your finances, you need to set a schedule for your current loans and stick to it. Make sure that you know what you have to pay each month, and right that in bold letters on a calendar. If you can set up an autodraft for the payment, you may want to do that as well. That way you never even have to think about it.