Cash Advance Debt Consolidation
A Cash Advance Loan (also known as a payday loan) might be the best option for your short-term cash needs. These loans are advertised as being able to help you in financial emergencies and can even be used to help you save money. Cash advances can be complicated and lead to difficulty to pay debts. There are options to get your loans back so you can move on from this difficult situation. Cash advance debt consolidation is the first step to resolving your financial problems.
The Loan Debt Trap
A Cash Advance Loan can often lead to a deeper debt trap. You can fall into a debt trap when you think you have some relief in the short term, but then you end up with high-interest debts that are hard to pay.
High-interest rates are the main reason cash advance loans can become a debt trap. Cash Advance Loans require full repayment within a short period, usually around one to two weeks. You are responsible for paying the entire loan amount and any fees by the due date. The high costs make it more difficult to pay.
Lenders’ charge fees vary but can often be as high as $30 per $100 borrowed. If you borrow $200 to pay your credit card bill and you don’t have late fees, this means you will end up paying $260 when you get your next payday.
Lenders offering cash advance loans will typically choose to pay higher fees unless they are required by law.
The average annual interest on cash advance loans is between 300 percent and 800 percent in most states. If you cannot pay the entire amount, you can rollover the debt to pay the fees and then get an extension to repay the loan until the following week.
How to climb out of the trap:
You will likely wonder how you can get out of a financial bind if you find yourself in dire financial straits after taking out a few cash advances loans. The Cash Advance is different from regular loans or credit cards that have fixed monthly payments and allow for gradual repayment.
There are options to get your loans back so you can move on from this difficult situation. Cash advance debt consolidation is the first step to resolving your financial problems.
Talking to creditors is the first step in consolidating cash advance debt. You will likely end up paying more than the entire loan amount within the first two to three months after taking out the loan. You may need some financial help if you’re still having trouble paying the loan payments.
Negotiating consolidation involves asking for lower fees and a more gradual repayment plan. Payday lenders must allow you to make a gradual repayment plan if you have difficulty paying the entire amount at once. State laws may differ slightly. Professional negotiators are available to help you restructure the situation.
Negotiations can continue after a payment plan is established or interest is reduced by requesting a settlement. A settlement is achieved by asking for a lesser principal amount. Even if you return a cash advance within two months, you are likely to spend far more than the initial sum. By negotiating an agreement that makes the loan cheap, you can pay the debts without additional issues.
Benefits of Settlement and Consolidation:
Once you decide that consolidating by negotiation and settling Cash Advance Loans are suitable for you, you’ll see immediate benefits.
You will be able to pay less and get out of debt. You will need some help if you’ve fallen into debt with promises of quick cash. Consolidation and Settlement is cheaper option that allows you to get out of debt.
One benefit often overlooked is the improvement in credit ratings. Although you’ll need to rebuild your credit score, settlement can help you improve your rating information right away. It is temporary, and your credit score will improve each month. You can reduce your debt and improve your credit score by paying off high-interest loans.
Once Cash Advances become out of control, they can be difficult to manage. Consolidation and settlement are options that can improve your financial situation. To learn more about consolidating cash advances, call us or complete the form.