Have you ever gotten yourself in a place where you needed a debt consolidation loan? If you have not, then you must be among the luckiest people on earth. But, unfortunately, it has become a norm in the current society by having debts-at least not everyone.
However, the most significant percentage finds it challenging to pay off their debts, especially after Coronavirus hit the world. That’s why there are options of taking a new loan to consolidate other loans.
In this post, I will show you the benefits of payday loans over debt consolidation loans.
But first,
What are payday loans?
A payday loan is a small loan with high interest that will help you fund emergency needs, and you usually repay them after a short while. However, some people fear payday loans due to their nature of high-interest rates. But you will always find that payday loan businesses are thriving due to high demand.
However, payday loans can turn out to be the best funding than debt consolidation. Keep reading, and I’ll show you how.
What is debt consolidation?
When you apply for debt consolidation, it means that you will use it to pay off more than one loan. This way, you will only pay one loan instead of paying multiple lenders monthly.
In most cases, the consolidation loan should have less interest rate compared to the other debts.
So, how do payday loans super cede debt consolidation loans?
1. It’s fast to acquire a payday loan
Most debt consolidation loans have a longer application process, which may keep you waiting for so long. On the contrary, a payday loan application can not take more than 10 minutes. In addition, you may have the money in your bank account within one business day.
2. Payday loan lenders don’t conduct credit checks
This reason makes payday loan lenders trow day in day out. Its growth results from millions of Americans having lousy credit scores and can not access bank loans. In addition to its quick application process, payday loans stand out as the best for emergency purposes.
Most debt consolidation loan lenders will run credit checks before they can help you. However, they only accept if you have a credit score of more than 670. Therefore those with bad credit have no hopes for these loans.
3. You can spend payday loans for whatever purpose you want
Once you apply for a payday loan, the lender doesn’t have to know that you will pay another debt. They only need to know that you can afford to repay the loan in full.
So, if you get a balance after paying off your debts, you can use the money for your other projects.
However, you will have to pay the loans with debt consolidation loans and not have any balance. So, the focus is only to pay off debts and nothing else.
The debt consolidation loan lenders like Gday Loans might also go to the extent of requesting statements with the other lenders.
4. Online applications
You can apply for payday loans via an online platform. That saves you time and money you could have used to go to a physical store.
Most debt consolidation lenders have physical stores where you have to go there personally to get the services.
5. There are no charges in payday loans
If you opt to apply for a payday loan, the lender will not charge you up-front fees before you pay the loan. The only extra coin you pay is the interest fee, which unfortunately is a bit higher.
To get a debt consolidation loan, the lender will require you to pay a certain upfront fee before gaining access to the loan. And that translates to higher costs of the loan.
6. You may pay higher fees
When you take a debt consolidation loan, there is a possibility of paying more than you have been paying. Therefore, you should only get this kind of loan if you can afford it.
After agreeing with your lender, you will know the fixed amount of money you are supposed to pay back with payday loans.
Bottom line
If you need to take a payday loan, ensure that you can afford to pay it off. Payday loans can be so expensive in most cases.
In addition, ensure that you reduce debts as much as you can. Focus on creating more income sources, and it will be easier to stay out of debt. Remember, you cannot achieve financial freedom while you have lots of obligations under your belt.