Payday Loans and Debt Consolidation
Many borrowers turn to payday loans help paying off loans in times of financial hardship, but the two-week payment period is simply not enough breathing room. Even if you have the cash to pay off a car repair or emergency bills, payday loans are not the best solution for a full financial recovery. It is always better to explore other options, including debt consolidation. However, if you find yourself stuck in a cycle of debt and are having difficulty repaying your loans, you may want to consider a different type of loan.
How to Get Help Paying Off Loans
Payday loan companies charge between $10 and $30 for each hundred dollars borrowed. While it may seem tempting to ask a friend or family member for money, you should be aware that this practice can damage your credit score. Defaulting on these types of loans is not reported to credit bureaus and can be disastrous for your finances. Fortunately, there are ways to get back on track, such as no-interest loans.
A debt management plan, also known as a DMP, helps people with payday loans manage their finances and eliminate debt. In most cases, a credit counselor will recommend a payment plan for you based on your financial situation. The DMP can be an affordable option if you need to pay off a large balance quickly. It is possible to consolidate a number of high-interest loans into a single low-interest loan. But it can take months to get out of a rut of constant borrowing.