Payday loans can be a great idea to replenish your funds for paying bills. However, some lenders charge an overwhelming interest rate and additional charges. This is a difficult situation, especially if you are already struggling with debts that you can’t pay.

In the UK alone, millions of workers take out a payday loan every day. Most of them end up rolling over into a new set of loans because they can’t commit to paying within the due date.

This is where payday loan consolidation comes into the picture. It’s a better alternative to remedy a borrower from getting trapped in the debt bubble.

What is Payday Loan Consolidation?

Lenders allow a borrower to apply for a new loan with the lowest interest rate. Instead of paying it up on the next paycheck, the lender allows the borrower to pay it on a monthly amortization schedule for a lower fee. The borrower has more freedom to pay his or her debt over time.

How to Apply For a Payday Loan Consolidation?

• Look for a lender that offers this type of loan.

There’s a ton of choices that you can find online. Check credible lenders that offer this type of loan and pick the one that offers the lowest interest rate. If you need to call them with questions, don’t hesitate to do so.

• Submit all the requirements needed.

Don’t be intimidated if the lender will do a pre-qualification check and credit investigation. It’s part of the process and most likely will not affect your chances of getting approved. Just make sure that you don’t miss any requirements to avoid delays.

• Assess if you can commit to the monthly payments.

Once your loan application is approved, the lender will discuss the estimated interest rate, loan term, schedule, and amount you need to pay for. If the deal sounds good, go ahead and sign the contract. But if you see that it’s something you can’t afford, look for another lender that can help your situation.

The Benefits of Getting a Payday Loan Consolidation

Here are the reasons why you should consider getting a payday loan consolidation instead:

• Lower interest rates and fees.

To help yourself get back on track, applying for a loan with the lowest rate can help greatly. Lenders offer as low as a 1% interest rate and without extra charge or hidden fees.

• Better payment terms

Instead of paying your loan immediately the next paycheck, this route offers a longer payment term that can go as long as 24 months. This also depends on how much you borrowed and your capability to pay.

• Better tracking of payments

Since there’s a monthly payment schedule, it’s too hard for you to miss a single monthly payment. It’s too predictable and straightforward that you don’t have an excuse to miss your due date.

• Zero rollovers

Once you’re done with paying your loan, it’s a done deal. Your account with the lender will be closed, and your debt will be marked as paid. If you ever need financial assistance again, you can always apply for a new loan instead. 

Key takeaway

If it seems like all hope is gone especially handling your financial matters, maybe you’re just not finding the right answers. No one is supposed to be trapped in a debt bubble for a long time. If you made a way to get in, you could also make a way to get out of it.

You can take advantage of payday loan consolidation as your last resort to free yourself up from your previous loans. However, it takes some time to finish paying it off; at least you know it’s going to be over sooner than later.

Truth be told, there is still a lot of working-class in the UK that are not aware of the consequences involving unpaid payday loans. At first, they take advantage of easy access to cash then forget the responsibility that follows. This gap happens most of the time because of misinformation and lack of education about the subject matter.

Running low in cash happens to everyone, and it’s understandable that you would need other means to assist your dire need to pay for bills and other expenses. That explains the increasing rate of employees getting a payday loan in times of crisis.

But before doing so, you need to learn how to pay your debt in time and not get in trouble with lenders. Here are some tips that will help you to pay off your loans on time:

• Agree to settle your payments via Continuous Payment Authority (CPA).

This might be concerning for some, but if you apply to a credible lender, they won’t just take your money without your consent. You should have your payment under CPA so you won’t have to take the trip to the bank and pay it yourself. Since it’s automatically deducted from your account, you will no longer have to deal with forgetting to pay and incurring penalties for missing the due date. You can always check your bank account to confirm if the lender has deducted the amount as per the agreement.

• Leave enough balance in your bank account.

As a borrower, you are responsible for keeping your account in check as well as your debts. It’s important that you set aside an amount for payment so the bank won’t charge you extra fees just to incur a deficiency. It will help if you set a reminder in your phone to never withdraw all your money from your account. This way, you can avoid the hefty charges from the bank.

• Understand the loan contract before signing.

As a borrower, you have your rights, and it’s just fair to exercise them. If there are things that you don’t understand from their terms, don’t hesitate to ask a question. Make sure there are no hidden charges that were not revealed to you during the discussion. You don’t want to be surprised in the end that you are paying more from what was agreed. This is one of the common mistakes that most borrowers commit. Not reading the contract well can put you in a bad situation.

• Don’t get multiple loans that you don’t need.

Some borrowers would apply to different lenders all at the same time, thinking that they’re getting more. However, it’s the opposite. The larger amount you are borrowing, the larger amount that you are going to pay as well. Imagine dealing with different interest rates from those lenders. Your income will greatly suffer once the payment date arrives. Just because it’s easy to get payday loans, don’t get tempted to abuse and put yourself in a bigger hole of debt.

Key takeaway

There’s nothing wrong with taking out loans such as Payday Loans. It’s purely natural for us to be placed in tight financial situations at times. If you see the need to get a loan, go ahead and do your part to take on the application process.

But in return, be a responsible borrower. The moment you signed the contract, you have agreed to take the loan and pay all of it on the exact due date. Practice having a good credit status, so the next time a financial crisis comes up again, the lenders will be happy to have you back again. 

You must have heard this before that Payday Loan is one of the easiest loans that you can get like any other. Although it’s technically true, you still have to consider that the lenders need to evaluate your qualifications whether or not you can be approved for a loan.

If you don’t have an idea of what it takes to have a higher approval rating to get a loan, chances are you will be denied immediately. Educating yourself ahead of time can help you better prepare for your application process.

There is a list of criteria that the lenders check to help them approve or disapprove your loan application. Here are some things to prep you up before you start applying:

1. Check if you meet the basic requirements.

The lender, whatever company they are, requires the same list of requirements. First, you need to be a UK resident and at least 18 years old and above. Second, you need to show proof of employment. And lastly, you have to submit a record of your bank account where the lender can pay you once your loan is approved. If you see that you meet these basic requirements, you can apply for your payday loan.

• Check if your income can meet the loanable amount.

You should know by now that payday loans require you to pay immediately on the next paycheck. For you to do this without a miss, you have to assess your personal income first. Deduct all your expenditures for that pay period and see what’s left from your paycheck. Whatever’s left will be the amount that you can borrow and be able to pay during the due date. 

• Ask questions

When you inquire about the loan packages, you will come across many lenders providing lucrative offers. Don’t decide on anything yet. You need to ask them about the loan eligibility and other such questions. Feel free to discuss the documents and requirements for the approval of the loan. This way, you can ensure that you are on the right path.

• Show off your positive credit status.

This is common sense, and lenders will never lend money to anyone that has bad credit. If you never had any bad debt from the past or existing unpaid loans, then you should be good. Other than the basic requirement that the lender considers, they also check your past credit history for proof checking. They need to know if you are a responsible borrower or not.

• Ensure that you follow all the instructions during the application.

Since the lender gives you an opportunity to file a loan application online, make sure that you do it right on your end. You don’t want to miss any details unanswered in your form, or it could delay the approval of your loan. Double-check if you filled out the form, passed the identity check and fraud checks. This way, the lenders can process your application faster and easier.

• Don’t get stuck in the wheel of debt.

Before you apply for a new payday loan, make sure you have paid other financial responsibilities. You know how much you are currently making and your paying capabilities. If your debt outweighs your income, you might have trouble paying your loans on your due date. 

Taking out a Payday Loan needs enough preparation and thorough decision making. Make sure you are committed to paying it off and only apply when you need it the most.