How Does It Work?

Debt consolidation companies offer payday loan consolidation as one of their consumer loan products. This works in a very similar fashion to standard debt consolidation loans: You contact the company and they, in turn, work with your lenders to establish a consolidated repayment amount.

Consolidating your payday-loan debt means that instead of running from one payday lender to the next, trying to pay off one short-term loan with another, you’ll have a single monthly payment. This also allows you to pay off your debt at a more manageable pace. Most payday loan consolidation programs run for 12 months and are designed so that you’ll pay off your debt during that time.

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Your debt consolidation company should be considered your representative as you try to resolve your outstanding loan balances. They will be the ones to act as a mediator between you and your payday-loan lenders, and they will try to lower the amount of interest that your lenders will charge, along with getting them to agree to a lengthier repayment time. Ultimately, the debt-consolidation company will be the mediator for helping you pay off your payday loans in a manner agreeable to both you and the lender. 

payday loan debt

A word of warning: When choosing a debt consolidation firm, don’t be hasty. Though there are many reputable companies out there who can help you resolve your debt, there are also scam artists out there. Instead of helping you resolve your payday-loan debt, these scammers instead take your money as a so-called administrative fee, rather than passing it on to your lenders. 

Before deciding to sign on with any debt consolidation company, make sure you run their name through the Better Business Bureau website. You’ll be glad you took the time to choose wisely. 

Can I Do It Myself? 

formThough it’s certainly possible to consolidate your payday-loan debt on your own, it’s worthwhile to ask yourself if flying solo is worth your time and effort.  

The answer to this question may depend on your state of residence: If you live in Alaska, Alabama, Florida, Illinois, Michigan, Nevada, Oklahoma, or Washington, you may have the option of getting an installment repayment program known as an Extended Payment Plan.

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Legislators in these states require payday lenders to offer these plans to borrowers. For more information, consult the PayDay Loan Consumer Information website. 

If an extended payment plan is not an option for you, take your negotiation skills into account before approaching this task by yourself. If you feel uncertain, working with a professional debt consolidator might be the best approach. 

Who to Contact 

calculating loan debtHere are phone numbers for a few major payday-loan businesses: 

  • Check ‘N Go: (800) 561-2274
  • Advance America: (800) 937-3437
  • National Payday: (877) 778-8006