Should You Consolidate Payday Loans

Payday loans are a staple of borrowing in the United States. However, payday loans can get you into a lot of debts; thus, some people have opted to consolidate payday loans to get out of debts quickly. The main concern of such borrowers is: Should you consolidate payday loans? What are the pros and cons? This article will review loan consolidation, its cons, and its pros. 

What Is Loan Consolidation?

Loan consolidation refers to taking a single loan to pay for multiple loans. The smaller debts are combined to a larger loan with lower interest rates and favorable payment terms. 

Consolidation is an excellent idea for paying off credit card debt, student loans, and other liabilities. There are two types of loan consolidations, secured and unsecured consolidations.

What Are The Advantages Of Consolidating Payday Loans?

Payday loans have high fees and unfavorable terms; thus, you can be trapped in vicious debts cycles. To break this cycle, you can consolidate payday loans for financial relief. Consolidating your loan at offers unlimited advantages. Here is how consolidating payday loans can help you better manage your debts:

Low-Interest Rates: Payday loans are quick and easy to acquire, but they have unreasonable interest rates. Consolidating payday loans with a personal loan will attract an interest rate of 5-36%.

Favorable Payment Terms: Payday loans must be repaid within two to four weeks, putting a borrower under unnecessary pressure. Meanwhile, you can consolidate several loans with a single personal loan that you will repay in 12-84 months. In addition, you can choose a period that suits you better.

Predictable Monthly Installments: Wherever you consolidate payday loans with a single personal loan, you will make a single monthly installment until you clear your debt. The monthly installments do not change until you repay the loan entirely.

Avoid Predatory Lenders: Although payday loans help, some lenders can take your money directly if you fail to pay, even if it means over-drawing from your account. Fortunately, consolidation loans will protect your account from such lenders.

Drawbacks Of Payday Loan Consolidation

Although payday loan consolidation is advantageous, there are some drawbacks:

Tough Eligibility Criteria: Although consolidating loans is a favorable option, qualifying for a sufficient loan is easier said than done. Your debt-to-credit ratio can either break or make your loan consolidation plan.

Minimum Borrowing Amount Limitations: Some payday loan consolidation solutions, such as personal loans, have a minimum limit. Sometimes, the limit is larger than the amount you need your payday loan debts; thus, it may add more unnecessary debts.

Loan Consolidation is Debt for Repaying another Debt: Consolidation loan solutions are loans you take to repay another loan; therefore, you cannot use them for business or other developments.

How To Consolidate Payday Loans

There are several Payday loan consolidation options at These options include:

Payday alternative loans (PAL): There are two types of PAL, i.e., PAL I, a $200-$1000 loan repaid in 1 to 6 months, and PAL II, up to $2000 payable in one year. In addition, APRs for Payday Alternative Loans are capped at 28%, while the application fee is capped at $20. Unfortunately, PAL is offered through federal credit unions.

Personal Loans: It is a swift option since funding occurs in one week. Personal loans have fixed terms. They have no collateral and have consistent monthly repayment plans. However, funding starts from $1000, and they have a high annual percentage rate (APR) for low credit borrowers. 

0% APR Credit Card Offer: Unfortunately, you need an excellent credit appraisal to qualify for this offer. 0 % APR Credit Card Offer requires no collaterals, and reputable borrowers can secure a 0% APR offer for up to 20 months. Suppose you don’t repay the balance before the 0% APR offer is up; you will pay interest on the remaining amount.

The Bottom Line

Although payday loan consolidation is an excellent way of managing multiple debts, it has its limitations. You can avoid taking debts to repay other debts. You can explore other options. For more solutions to consolidating payday loans, visit