Home Money Can debt counselling help you bid goodbye to your payday loan debt?

Can debt counselling help you bid goodbye to your payday loan debt?

Payday loans are the most convenient financing options for all those who can’t make ends meet with the monthly income that they make. These are short term loans that are lent to people who are suffering from mid-month financial contingencies. There are many people who can’t pay on their own when they incur sudden medical bills or car repairing costs and it is then when they borrow payday loans through which you can make ends meet, if not permanently, temporarily. However payday loan debt can sting you hard and you may have to immediately take some steps to get rid of it. Debt counselling can often help you when your total debt amount is manageable enough. Here are the benefits that you may reap from your debt counsellor.

He will assess your finances: The first step that the debt counsellor will take is to assess your financial condition so that he may offer you personalized help. The debt counselor will check the total amount of debt that you owe your payday loan lenders, the interest rates that you’re paying and the due dates on which you’re supposed to pay your debts. He will also require proof of your monthly income so that they know your fiscal affordability.

He will craft a budget: The next step that he’ll take is to craft a frugal budget for you so that you may be able to follow the budget and keep a balance between your monthly income and expenses. You should make sure that you follow the budget and save money at the same time to be able to repay the payday loans on your own.

He will teach you money management techniques: Your debt counsellor, after assessing your finances will teach you money management techniques so that you’re able to get back on the right financial track. By checking your techniques, he will tell you whether or not it is fine for you.

He will sign you up with a debt management program: When the debt counsellor sees that you can’t repay your debts on your own, he will sign you up with a debt management program through which you can repay the entire debt amount in easy and affordable monthly payments.

He will negotiate with your payday loan lenders: After you sign up with the DMP, the debt counsellor will negotiate with your payday loan lenders and tell them about the financial hardship that is barring you from making timely payments. The lenders will reduce the interest rates so that you can repay the loan amount with ease.

He will disburse the payments: The credit counsellor will not only negotiate but also collect the payments from you and then disburse off the payments to the lenders. This can gradually make you debt free.

Getting help from a debt counsellor is actually helpful as you can boost your credit score by repaying the entire amount in easy monthly installments.

Image credit: hitthatswitch (flickr)

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