Grace Enfield, Content Writer
@grace_enfield
Yes, you can consolidate payday loan debt by getting a larger loan or line of credit to repay the debt. Once your existing payday debt is taken care of, you will need to repay the loan provider or credit card issuer until the new balance is paid off.
Consolidating payday loan debt is a good idea if it will save you money. It’s hard to know exactly how much you’ll save, though. To estimate how much payday loan consolidation can save you, check out the free debt consolidation calculator on WalletHub.
4 Ways to Consolidate Payday Loan Debt
-
Debt consolidation loan
With a debt consolidation loan, you’ll use the funds from the loan to pay off your existing debt and then repay the lender. Some lenders may pay off your creditors directly. All you need to do is tell them where the money needs to go.
Using a debt consolidation loan is the best way to consolidate debt if you don’t want to put down any collateral and can’t get enough funds with a credit card.
-
Balance transfer credit card
When you use a balance transfer credit card, the issuer will pay off your creditors and then you will repay the issuer. If you can get a balance transfer credit card with a 0% APR introductory period, you should try to pay off your balance during that period. You’ll be subject to a high regular APR after that period ends.
-
Home equity loan
You can use a home equity loan for almost anything, including consolidating debt. You will need to put your house up as collateral if you get one of these loans, so you risk losing your house if you can’t repay it.
-
Home equity line of credit
A home equity line of credit lets you borrow money on demand like a credit card. You will have to use your home as collateral, though, so you may lose your home if you can’t repay what you borrow.
For more information on how to get out of payday loan debt, check out WalletHub’s guide on payday loan consolidation.
People also ask
How can I get out of payday loan debt?
The best way to get out of payday loan debt is to move the balance to a credit card or loan with a lower interest rate. Payday loans have extremely expensive interest charges, so transferring the balance to a card or loan that's less expensive will slow the rate at which interest accrues. That will enable you to put more money each month toward paying the principal balance, and get debt-free as quickly as possible.
... read full answer by Gino Rodriguez, WriterWill payday loan consolidation hurt my credit?
Payday loan consolidation may hurt your credit slightly in the short term, but in the long run it has the potential to improve your credit score. When you apply for a debt consolidation loan or balance transfer credit card, your credit score will likely drop 5-10 points from the hard inquiry. In addition, if there is any sort of origination fee or balance transfer fee, your score may also see some slight damage from your...
read full answer by Gino Rodriguez, WriterDid we answer your question?
Important Disclosures
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers. For full transparency, here is a list of our current advertisers.
Advertisers compensate WalletHub when you click on a link, or your application is approved, or your account is opened. Advertising impacts how and where offers appear on this site (including, for example, the order in which they appear and their prevalence). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.
Advertising enables WalletHub to provide you proprietary tools, services, and content at no charge. Advertising does not impact WalletHub's editorial content including our best picks, reviews, ratings and opinions. Those are completely independent and not provided, commissioned, or endorsed by any company, as our editors follow a strict editorial policy.