How To Obtain Installment Loans To Pay Off Payday Loans?
There are typically two options to obtain installment loans to pay off payday loans – first, you can borrow a conventional loan on your own, and second, you can sign up for a debt consolidation loan program. In both methods, you have an option to choose between a secured and an unsecured loan program. There are several factors that you need to take into your careful consideration in order to determine which of the options makes a better solution for you. Following is a brief rundown on it.
Conventional Installment Loans
Examples of secured installment loans to pay off payday loans that you can borrow from conventional lenders include home equity loans, loans against your car as collateral, and other such things. Where unsecured conventional loans require you to have a good credit score, secured loans can be obtained even with poor or bad credit. The best thing with a secured loan is that it charges very low rate of interest and offers very favorable repayment terms. But, the problem with secured loan is that it requires you to put a property as collateral against the money you borrow. If you fail to repay in time, lenders may sell that property to recover debt. Therefore, you are advised to be very careful. Go for it only if you are confident that you can make the repayment successfully without much trouble. Unsecured loans charge comparatively very rate of interest, but the rate is still much lower as compared to the extremely high interest
rate that payday lenders charge. Therefore, if you think that a secured loan can be very risky for you, you can consider borrowing an unsecured loan even if the rates are a little higher.
Working With A Debt Consolidator
Earlier debt consolidation agencies would not accept applications from payday loan borrowers because of the unconventional and predatory nature of payday lending. But, now that the number of consumers who are struggling with payday debts is rapidly increasing and that even the majority of states have enacted several specific laws to regulate payday lenders, many debt consolidation agencies have started offering installment loans to pay off payday loans. There are two types of payday loan debt consolidation loans – secured and unsecured. The basic process is very much similar; the only difference is that the lender here is a debt consolidator. There are some added advantages as well. For example, a debt consolidation company first talks to your payday lenders and negotiates more affordable debt settlement plan. This way, debt consolidation loans also you to reduce your debt balances. You can save a great deal of money with this method. The only problem is that choosing the right company and right program is not an easy task. You will have to do a thorough research and comparison shopping before you go ahead and sign up with a specific debt consolidation loan program.
Overall, if you are considering borrowing installment loans to pay off payday loans, the options abound. It is just that you will have to be very careful with your approach.
Category: Payday loans