The advantages here are numerous. If you get a lower interest consolidation loan you stop dealing with the original lender. You can make monthly payments to bring down the debt, and by doing this improve your credit score.
The downsides are that it will take time to pay this down, and if you do not make your monthly payments you can end up in more financial trouble. When you sign up to consolidate payday loans you want to make sure you read the terms carefully and look for any fees that seem unreasonable to you.
You'll find the best deals at credit unions which are known for having the lowest interest rates. You can also check with your local banks, starting with financial institutions you already do business with as many places require you to be a customer for a few months before they'll offer you a loan.
The lowest interest options will be secured with your home or vehicle as collateral. The obvious downside here being if you miss payments you can lose your property.
With decent credit you may be able to find an unsecured debt consolidation loan. Be aware that this will have high interests rates, but much less than what you will pay on payday loan rates.
It is advisable to consider seeking a non profit financial counselor to go over your plan and your current situation. They will be able to point out any options you might not currently see that are available to you and help you find your best option.
If you're serious about getting out of debt quickly and working on improving your credit score a manageable option is to consolidate your payday loans.
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