Payday loans are loans drawn rather for small amounts, which should not cause a problem in repayment. However, life varies. If it turns out that we are unable to pay the payday payday on time, the refinancing option may be a salvation. What is refinancing of payday loans, how can it help you and what are the pros and cons of this option? Check with the Financial Market today.
Refinancing the payday loan – what is it?
Refinancing is an extension of the loan repayment period, which consists in transferring the debt from one loan company to another. You can apply for them in many loan companies (e.g. in Providence). This is of course a paid service. If we decide to refinance, we will get a slightly longer repayment period in installments. However, the repayment amount and terms will change.
If you do not have enough funds to pay the payday loan, do not hesitate, but be sure to contact the loan company and ask for refinancing. Thanks to this, we will save ourselves a lot of problems with non-compliance with the contractual terms. Currently, most loan companies offer such refinancing, but it is best to go for consolidation where the payday loan was incurred.
Pros and cons of refinancing payday loans
When deciding to refinance payday loans, you must bear in mind that this is not a free process. Large additional fees will be charged, but if we have no other option, it is worth accepting them, because thanks to this we will avoid entering into the credit bases as a debtor, we will save ourselves harassment on the part of debt collectors, and we will also protect against bailiff proceedings. However, it should be remembered that along with the loan agreement, the table of fees and commissions as well as the repayment dates will change. So you should ask for the payday refinancing agreement in great detail.
Several loans from various companies
When deciding to borrow from private companies, it is necessary to think about whether we can afford to pay back the debt in the short term. Of course, it is possible to take a few payday loans, in different companies, if we need more cash, but this means that the costs will be very high, because high interest will be charged on each product. It is best to take the opportunity to take out a loan for a higher amount with a longer repayment period and to use it to pay off other liabilities with higher interest rates . Most known loan companies offer them.
Such a procedure of a specific consolidation of loans by taking out one installment loan, with a lower interest rate, for the repayment of other liabilities can be carried out, for example, in Rapida – a company that has one of the lowest interest rates on the market and provides loans despite a bad credit history, using a guaranteed institution. You can read more about the guarantee here.