Many people live paycheck to paycheck, and the money they make barely covers their daily expenses. Any unplanned expense, therefore, causes a severe financial crisis, and many opt for payday loans to solve these emergencies.
Payday loans are intended to be used for small purchases until your next payday. Interest rates on these short-term payday loans are usually very high and repaying the money at those rates often leads to payday loan debts.
Dealing with these debts can be frustrating and emotionally draining. If you feel like you cannot pay off the debts on your own, you may have to consider getting help from a debt consolidation program. Here is how you stand to benefit from consolidating payday loan debt with a debt consolidation program.
Why do you need Debt consolidation program?
- Interest Rate Reduction
One of the most significant benefits of a debt consolidation company is that they negotiate with your creditors to have your interest rates reduced. Your creditors then restructure the payments so that you can manage your debts better.
- Eliminate Late and Over Limit Fees
When you default on a loan, penalties, late charges, and accumulated interest pile up with time. With a debt consolidation program, these fees can be reduced or even removed through negotiations.
- Lower your Monthly Payments
A debt consolidation program could see to it that your debt is reduced up to 50%. All your unsecured debts are combined into one smaller monthly payment with a lower interest rate.
Reduction in interest means that you will be paying off the principal sum than the accumulated interest.
- Make One Quick and Affordable Payment
Debt is excessively daunting, and trying to juggle several monthly payments to numerous creditors makes the situation even worse.
With the help of such a program, you will make your payment to the creditor counselor, and they will allocate the money accordingly.
- Become Debt Free Faster
Once the negotiations are over, you are given an amount that must be paid to your counselor on time every month. This amount is usually less than you are used to paying, and your counselor consolidates your debts and gets reductions on fees for you. This ensures that most of your money goes to the principle debt instead of the interest accumulated.
- Stops Collection Calls
When you sign a power of attorney with the consolidation program, your creditors and collection agencies typically stop bothering you with numerous calls. This saves from harassment from the creditors.
- Free Debt Counseling
Most programs offer free debt counseling service to debtors. This counseling gives a chance to analyze your situation and discuss your alternatives to financial freedom.
Dealing with debt is stressful, but a debt consolidation program can help save the situation. With their help, you will set up a system to eliminate the debt in the shortest time possible.