Defaulting on payday loans can significantly damage your credit score, and the resulting high penalty fees can make the situation even worse. Joining a payday loan consolidation program is an effective way to address this issue. These programs are designed to help you streamline and clear your payday loans efficiently. Debt consolidation firms work closely with you to identify the best methods for consolidating multiple loans, enabling you to pay them off simultaneously and regain control over your finances.
Here’s how a payday loan consolidation program typically works:
Consultation
You first sign up for the program, after which the consultant collects financial information such as monthly bills, client’s income, and payday loan interest. It is also at this point that the financial consultants find out what kind of collateral was offered for the loan.
Reaching Out to The Lender
The debt consolidation company reaches out to the payday loan lender and explains the problems you as a client are facing financially and comes to an agreement where they can forego any penalties you may have incurred. Your consultants will then meet with you and come up with a repayment plan where you can get another loan or source money from elsewhere to pay up the multiple payday loans at a go. Then you will come up with a plan to pay the debt consolidation loan you took based on lending interests and your income.
Requirements For Signing Up For A Payday Loan Consolidation Program?
Proof Of Monthly Income
To pay the newly arranged monthly installments, one requires a form of income. One is required to produce their most recent paychecks and financial statements in case one is self-employed.
Proof Of Business Or Residence
You will provide documents with proof of your residence to the payday loan consolidation company. This is necessary in case you default on your new payment plan.
An Outstanding Minimum Debt Balance Of 10,000 Dollars
A lender will only waive your penalties if the pending loan is not more than $10,000. This allows both the lender and the debt consolidation companies to make profits from the installments you pay.
Collateral
Collateral is determined by the consultants by determining the value of company shares, monthly income, business, and assets value. In the case that a client is unable to pay off the loans, these assets can be sold off to repay the debt
Discontinuation of Payday Loan Consolidation Plan
Giving False Information Intentionally
Concealing information on assets and income to reduce the amount of installment you pay is an offense. One is required to fill out a declaration of honesty form when signing up with a debt consolidation company.
Loss of Income
In the case that a client loses their job or hard economic times force them to close down their business, they may not be able to meet their monthly installments and this will force the client to sell off some of their assets to offset the debt.
Refusing to Honor Monthly Installments
If a client disappears or does not honor the monthly installments agreed upon, the payday loan consolidation company can get their financial statements from the bank to confirm whether loan payments are up to date. If a debtor does not make any payments for three consecutive months, some companies will nullify the agreement.
Relocating Secretly
Relocating to another state without informing the debt consolidation officers can lead to discontinuation of the program. In the case that a client is relocating to a new place, the best thing is to inform the debt consolidation officers and provide them with details of the new location and physical address of the business or residence.
Attempting To Change Your Names Through Illegal Means
If a client changes their names illegally, it will be almost impossible for the lenders to trace the client if they relocate. A defaulter that successfully changed their name can relocate and move on with their lives without being traced by the lenders.
The Upsides of a Payday Loan Consolidation Program
No More Stress From Creditors
Signing up for a debt consolidation program will relieve you of the stress that comes with lenders always calling to ask for their money back.
Regain Control Over Your Monthly Income
By negotiating much lower repayments, a loan consolidation officer will help you manage your lifestyle and allow you to honor the monthly installment you are required to pay.
Financial advice
During this period, a client has regular meet-ups with the financial consultant who will help them make wise financial decisions and avoid debt in the future.
Stress-Free Payday Loan Consolidation with Encompass Recovery Group
Are unpaid payday loans causing you stress? Take the first step toward financial freedom by partnering with a trusted payday loan consolidation company. At Encompass Recovery Group, we provide expert guidance on consolidation options tailored to help you manage your repayments and regain control of your finances. Contact us today at 877-769-0109 and let us help you resolve your financial challenges with confidence.