How to Find a Legitimate Payday Loan Consolidation Company

Payday loans are offered to consumers who are in dire need of cash before their next payday. As the name implies, the loan will typically need to be repaid in full once a borrower has received their salary. However, many individuals find that they are unable to repay this debt and are forced to roll over the loan once again. This can, unfortunately, become a vicious circle of taking out payday loans and rolling them over. Eventually, you may find that you have fairly significant debts and the interest being charged is extremely high, as is the case with the majority of payday loans.

This is when it may make more sense to consolidate these numerous loans into one easy to make monthly payment. However, finding a legitimate company that will allow you to consolidate your payday loans is easier said than done. Unfortunately, there are many companies that are simply out to get your money and they have many illegal practices you should be aware of:

Does the lender require an upfront fee?
Although this isn’t always the case, if a payday lender asks you for an upfront fee, you should proceed with extreme caution. Some companies give the pretext that this fee is for insurance purposes, a security deposit, a service or application fee. A legitimate payday consolidation lender will be more interested in knowing whether or not you meet the basic eligibility criteria.

Does the payday lender only specifically deal with borrowers with bad credit?
Many payday lenders prey on people who are in a vulnerable financial situation. Unfortunately, if you have a fair few payday loans and you wish to consolidate these, you fit the bill perfectly. No lender will simply approve an application based on the information you give them without doing some investigating themselves.

This will typically come in the form of a credit check, and if it is found that you have bad credit you can still be approved a loan, but with less favorable terms and interest rates. Payday loans are known to present the highest risk to both lender and borrower, and therefore you should be extremely wary of a lender touting for bad credit business.

Have you been offered a secured payday loan?
There is no such thing a secured payday loan, so if you are offered one, run a mile in the other direction. Payday loans and payday consolidation loans are growing in popularity, but still to this day no lender will ask you to provide a valuable asset as collateral.

You can, of course, take out a secured loan to consolidate your debts, but this will generally be offered by a mortgage or home loan lender. The Federal Trade Commission has warned consumers to be on the lookout for these types of lenders, and has aptly named them “predatory lenders”.

Is the lender forcing you to take immediate action?
If a payday consolidation lender tells that you need to do something immediately in order to be approved, this should set a few alarm bells ringing. This is especially true if the lender is asking you to wire or send money, and you are best off avoiding this type of lender altogether.

Have you checked the lender’s contact details?
A legitimate payday consolidation lender will provide you with contact details via either a website or telephone number. It is advisable to check by calling or sending an email, as many illegitimate lenders will simply provide you with fake details in the hope that you will never contact them.

Is the lender asking you for too much information?
There are certain details that you will need to provide to a payday lender if you are looking to consolidate your loans, but you should be a little wary of a lender asking for too much personal information. The only details they specifically need are your income and employment details, your checking account numbers, and some very basic personal information about yourself. If you find that a lender is asking a number of highly irrelevant questions that are not likely to make any difference to your application, you may be a target for identity theft.

There are many legitimate companies that offer payday loan consolidation, and it’s simply a case of being on your guard and following the above steps to ensure that you get a great deal.

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