Payday loan debt consolidation with us is fast and easy
Managing your debts with different financial institutions becomes an exhausting task, as their amount increases. In addition to this, you must be very careful in such management, to avoid falling into default, and with it, damage your credit history. Therefore, it may be convenient in that case to consolidate payday loan debts in a single entity.
A payday loan debt consolidation is a financial operation, made on the basis of a loan, which allows you to unify your debts into a single one. It has the advantage that the consolidated debts can be of a different nature (credit cards, personal loans, mortgage loans, etc.) and from different financial institutions.
To understand how a debt purchase works, I give you the following practical example. Suppose you currently have the following debts:
- Debt for vehicular credit, with bank A.
- Credit card debt, with Bank B.
If Bank C buys your debt, it pays in your name, the respective debts you have with banks A and B. This payment is made using a capital, which Bank C grants you as a loan. Therefore, after the purchase, you stop owing banks A and B, and you only owe C.
How to consolidate debts in a single entity using a home equity loan?
In case you do not want or can go to a debt purchase, and own a real estate free of charges and encumbrances on the property, you have another alternative. It consists of requesting a home equity loan for the amount owed and using that capital to cancel your global debt.
Note how this option is similar to the purchase of debt, with the difference that you directly cancel the institutions to which you originally owe them. In fact, some banks offer debt purchases through home equity loans.
In case you opt for this option, you must be very strict in the administration of the loan, and in the payment of the same, Remember that in a loan with mortgage guarantee you place a real estate in guarantee, and therefore, you can lose it in case of default.
What are the advantages of consolidating debts in a single entity?
Any of the two previous options that you use to consolidate debt will give you the following advantages:
- You simplify your payment management.
- You get better credit conditions, such as a decrease in debt administrative expenses.
- You do not negatively affect your credit history.
- And in the case of a home equity loan, you can reduce the cost of the loan, since it works with a lower interest rate than the remaining loans.