Having difficulty paying for your payday installment loan? Consider debt consolidation.
Debt consolidation means using one loan to pay off another. This is a good option when you are stressed out about how to make ends meet or if you’re being repeatedly contacted by your lenders.
So how do you consolidate debts on payday installment loans? Here is how you do it:
1. Know the outstanding balance on your payday installment loans and other unsecured debts. Calculate the amount of your total debt.
2. Find a reliable debt consolidation company. These companies help you consolidate your payday installment loans. They also offer a free debt counseling session where you can get advice from a debt counselor about your financial problems. The debt counselor will give you suggestions about what consolidation program or debt settlement you need. Make sure that you have contacted a reputable debt counselor.
3. Try to negotiate a reduced rate for your new loan. Ask your debt consolidation company to negotiate with your payday installment loan lenders to get lower interest rates so you won’t have a hard time repaying them. Also ask help about the reduction of late payment fees and additional charges.
4. Follow your new payment plan. Negotiate for monthly payments that are affordable for you to repay. Make sure that the new payment plan is convenient for you.
If your payday installment loans are turned over to a collection agency, here is what you should do:
1. Check the Statute of Limitations or SOL on your debt. The statute of limitations is the time period when the debt is considered expired or when you will not be obliged to pay for your debts. This depends on the state where you live.
2. Request a debt validation. If your SOL is not expired yet, the Collection Agency can win a judgment against you and garnish your wages. So, ask the collection agency to validate your debt by sending you a validation letter.
3. If the collection agency granted your request for reconsideration, you may not consolidate and pay off your debt with the lender. Remember that negotiations are done between you and the collection agency. So the original lender cannot impose additional charges. Deal with the collection agency and not with your lender.
4. If the SOL has expired, the collection agency cannot win a judgment against you. But this doesn’t mean that you can run from your debt. The collection agency will still collect it from you. What you should do is to send a cease and desist letter or apply for a debt consolidation loan to pay off your unpaid payday installment loan.
What are the benefits of consolidating payday installment loans? Applying for a debt consolidation loan helps you pay lower interest payments and reduces late fees. Most of all, you get out from a stressful situation.
Debt consolidation is one option for paying off multiple payday installment loans. However, making timely payments is still the best way to avoid a stressful financial situation.