Payday Loan Settlement Programs
Loan settlement programs have become increasingly popular in the recent past. This is mainly attributed to that many people are struggling with loans from different lenders. Such loans can cause a lot of financial strain and this can result in a lot of harm. But with the loan settlement programs, it is possible to reduce the financial burden of paying the different loans. One of the most popular programs is the payday loan settlement program. This particular program helps to reduce the financial burden of a person with a number of payday loans from different lenders. Here are the benefits of payday loan settlement programs.
Reducing the Amount to Be Repaid
A settlement program geared towards payday loans primarily reduces the cumulative amount to be paid back. This is because the different lenders do not get the original high amounts that they would have gotten without the program. The person repaying the loans now has to pay a reduced amount after the settlement program. There are programs that reduce the cumulative amount to be repaid even by sixty percent. This is the main objective of the program and plays a significant role in reducing the financial burden of having to repay the high amounts.
Having a Single Payment
The settlement programs usually put the different payday loans together so that the person affected can only make a single payment. This means that instead of making different payments to the different lenders one now just needs to make a single payment to a settlement company. This is very convenient because after making the single payment one just needs to wait until the next payment. The single payment also means that there will be no need to pay different interest rates to different lenders.
Avoiding Extra Charges and Fees
Almost all lenders usually charge extra fees and charges if one makes a late payment or is unable to pay. These charges and fees also significantly increase the amount that one has to repay. But with payday loan settlement programs these charges and fees are eliminated. The different lenders will not be allowed to charge extra charges or fees after the settlement program. This significantly reduces the risk of having to pay even more after being unable to repay the payday loans on time.
Avoiding Lawsuits or Legal Actions
When the settlement programs are concluded the lenders cannot sue the people who had taken the payday loans. This is a major benefit especially to the people who are completely unable to repay the payday loans. The lenders will have to accept that the extra money cannot be recovered and therefore cannot legally go to sue. The person who had taken the payday loan will, therefore, feel secure and independent after the program has been put in place.
Protecting Credit Score
The credit score will not be improved by payday settlement programs. But it will be protected by the damage which would have risen had one been unable to repay the original payday loans. When one is unable to repay a payday loan the lender will take action which will result to the credit score of the person who had taken the loan being affected negatively. With a poor credit score, it becomes harder to get a loan even from other lenders. Therefore, with a settlement program, the credit score is protected where it cannot be lowered than how it was even if one is unable to repay the loan.
Improving Ability to Borrow
The settlement program will make it easier to pay the various payday loans and this will give the person more freedom to borrow from other lenders. This is helpful especially when is having an emergency and would like quick funds. The ability to get loans from other lenders can significantly improve the financial status of the person struggling with payday loans. People who are employed especially benefit from this because their pay slips are improved.
Avoid Harassment from Debt Collectors
Most lenders will use different methods to collect debts from people who have been unable to repay payday loans. When one is having several payday loans it can be very stressing when the different lenders are trying to use different methods to get their money back. There are some lenders who can even embarrass the people who had borrowed payday loans by using some unethical methods. But with a settlement program there will be harassment from the different lenders. Therefore, payday loan settlement programs are very helpful to people with different payday loans and are feeling the financial stress of these loans.