How to Use a Long-Term Loan to Consolidate Debt
Why you should treat payday loans as a one-time resource
If you have a strong fiscal discipline and have followed a budgeted expenditure plan, you would probably never need a payday loan. Still, sometimes, even the most responsible spenders with a steady income and good savings suddenly face a cash crunch. A sudden emergency like getting a car repair following a breakdown or an unplanned home repair may crop up out of nowhere. You may have to carry out medical diagnostic tests not covered by your medical insurance.
Now, if you treat a payday loan as a short-term loan as it has been designed, you will be safe. As soon as you get your next paycheck, the principal and the fees would be deducted from your bank account or you could pay the lender in store. However, if you miss your payment deadline and roll over the debt, and this happens a few times, very soon you would find yourself caught in payday loan debt. The rate of interest builds quickly when left unpaid for further days and weeks. Debt consolidation with a long-term loan could be a sensible option for you.
Cashco Financial flex loans are available in Calgary, Toronto, Vancouver, Edmonton, and many other Canadian towns and cities. The loans can be given online or you could walk into one of our many branches across Canada. Filling out the online form takes seconds and you will have your approval answer in a minute or two.
Flex loans can be used to consolidate debts. Our agents help you along the way. You could also seek financial counseling if you find difficult to manage your finances. You won’t be asked to wait outside a glass door and spoken to over an intercom. Our agents at Cashco Financial invite you to sit down at a desk and are extremely friendly and easy to engage with. Even when you find it difficult to pay a monthly bill or your payday loan, our representatives help with you and try to find other payment options. Cashco Financial will try to protect your interest and wellbeing at every step.
Why is debt consolidation with long-term fixed loans better than with credit cards?
Sometimes debts can build up quickly, and the moment you start missing payment deadlines, your credit score could suffer immensely. Long-term installment loans like Cashco Financial Flex Loans have a fixed APR and you know the exact amount you will have to pay. Starting a new line of credit or taking a credit card cash advance to consolidate your payday loan debts could easily add to the debt mountain instead of mitigating the situation, since the rate of interest is very high and every time you don’t pay more than the minimum amount due, the debt revolves and adds to your previous debt mountain.
You could get trapped in a spiraling debt situation forever. A credit card could rebuild your credit score quickly but the chances of default are also high. Also, if you don’t have a steady income or you continue to spend more than you earn even when you are in debt, a credit card isn’t much help. Rather, a long-term installment loan will have a lower rate of interest.
Debt management plans are also a preferred route for many and this can be done in consultation with your payday lender.
Long-term loans used for debt consolidation is helpful since they usually lower the interest and instead of paying multiple lenders, you have to pay just one in periodic installments. However, don’t forget that it is also a loan. Be serious about your plans to clear the debt and don’t treat a long-term installment loan to get a breather as you will now have more time to settle the debt. You will have to continuously attack the loan. Try to make a budget and save money so that you can pay more than the monthly installment.