It’s a fact that payday loans are the most common form of short term loans in the UK. A lot of us use these types of loans, either for unforeseen circumstances or to tide us over till the next payday.
But for the majority of us the payment schedule is just too hectic and the month seems to fly by and we find ourselves with bills piling up and no way to manage them. Or perhaps there are unexpected expenses such as a car repair or a holiday. These types of unexpected events can change the way we plan our budgets and we wonder how to get out of the hole faster.
For some people the best way to consolidate payday loans is to take out a new loan. Many lenders offer a consolidation loan, which is a single loan covering all your existing debts. Most lenders do this so you don’t have to make many separate payments each month.
You may be able to get an introductory rate if you’re taking out an unsecured loan. In some cases you may even be able to get a lower rate if you choose a shorter repayment period.
There are other options too though and I’m not going to list them all here but to briefly go through them. The first thing you should do is to check online to see what you can find. Some lenders will give you a quote for a consolidation loan and often you can get instant approval.
If you take out an additional loan to cover your current debts and any emergency charges you will only be digging yourself further into a hole. You’ll end up repaying both loans and maybe you’ll end up repaying the same lender in the end. In order to consolidate your payday loans you must take out one large loan. When applying for a consolidation loan for payday loans, you should only consider the same lenders that you used previously. This will help you avoid any hidden fees and can save you a lot of time.
Next you need to get your credit record in order. You should always pay all your bills on time and pay off your debt as quickly as possible. If you make your repayments early you’ll pay off your credit quicker.
Don’t expect your lenders to change their policies unless you make a formal complaint about it. It’s very rare to be asked to sign a new agreement. It’s up to you to monitor your finances and keep your credit score in good order.
It’s really important to be vigilant when dealing with your lenders to try and keep your credit in good shape. By keeping a close eye on your spending and avoiding those types of expenses you should soon start to find your credit rating improving.
After a few months of paying on time and rebuilding your credit ratings it will feel easier to apply for more loans. And after a few years you will probably be approved for a new loan when you apply.
You may be able to negotiate a lower rate on your consolidation loan or you may be offered a fixed repayment period. Just make sure that you are careful to choose the right company to consolidate your payday loans.