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Is it Possible to Consolidate Short-Term Same Day Loans?

If you have multiple payday or same day loans, could consolidation help? This guide from Consolidation Expert examines the options for consolidating short-term borrowing.

Short-term, same day lending like payday loans can provide quick access to cash during
emergencies. However, the high interest rates mean repaying these loans often becomes
difficult, trapping borrowers in cycles of rollovers and fees that compound debt.

If you’ve ended up with multiple outstanding payday loans, could consolidation help combine
them into more manageable payments? In certain cases, it may be possible, but securing
approval remains challenging.

Here at Consolidation Expert, our lenders may be able to provide a debt consolidation loan
to help you consolidate debt, including short-term, same-day loans. By consolidating these
debts, you may be able to save money on interest and potentially stretch your repayments
out over a longer period.

Key Takeaways:

  • Payday loans allow fast access to funds but usually charge very high interest rates, making them difficult to repay. Rollover fees often trap borrowers in debt spirals.
  • While most mainstream lenders don't offer consolidation loans accepting payday loans, specialist lenders sometimes may if affordability can be proven.
  • Even then, payday loan balances likely need to be low compared to income, with a good credit score and secure employment demonstrated. Approval can be difficult.
  • Options like requesting extensions to the loan term from payday lenders, credit counselling or informal repayment plans may provide alternatives if consolidation falls through.
  • Anyone relying on payday loans should aim to break the cycle of rollovers by budgeting, seeking help early and exploring lower cost financing options before the situation becomes unmanageable.

The Risks of Payday Loans

Payday loans are a form of short-term, high-cost lending designed to cover urgent small-sum cash shortfalls until the borrower’s next pay date. They usually require minimal eligibility checks, forgoing lengthy applications in favour of fast same or next day access to funds.

However, payday lenders charge exceptionally high interest rates – often 400-1200% APR and above when calculated annually. This means costs accumulate rapidly when the short 1-month repayment term ends. £100 borrowed for one month may incur £20-£30 in fees.

These high costs make meeting repayment dates difficult. Many borrowers end up rolling over or reborrowing the payday loan, flipping the balance into a new loan and extending the excessive fee cycle. The interest and penalties can quickly trap you in a cycle of debt.

Before turning to payday loans, all other lower-cost financing options should be exhausted, and repayments budgeted for conservatively to ensure they align with upcoming pay dates. Otherwise, finding a way out can become challenging.

Can You Consolidate Payday Loans?

Most mainstream personal loan providers avoid lending to subprime borrowers with troubled financial histories involving payday borrowing. The business models and risk levels typically do not overlap.

However, some specialist consolidation loan lenders deal explicitly with debt reconstruction situations. In certain cases, if the full financial picture demonstrates adequate affordability, these lenders may approve consolidating a small number of outstanding payday loans – especially if balances are low relative to income.

Having steady, reliable income from employment significantly above the payday loan balances, combined with a reasonable credit history outside of the short-term borrowing, improves the chances of consolidation loan approval.

But given the often urgent, distressed circumstances leading borrowers to rely on payday loans in the first place, meeting specialist lenders’ criteria remains difficult for most applicants. Approval is not guaranteed.

If payday loan debt has become unmanageable, seeking help from a nonprofit credit counselling agency provides an alternative path to assessing options and striking reasonable informal repayment plans until finances stabilise.

What Are Some Alternatives to Consolidate Payday Loans?

If consolidation loan approval proves challenging, some other options to manage outstanding payday loan balances include:

01. Requesting Extended Repayment Terms

Contact your payday lender(s) directly to explain repayment hardships and negotiate stretched-out instalment repayment structures to avoid rollover fees and penalties. Most aim to be constructive within reason.

02. Credit Counselling

Nonprofit credit counselling services can help negotiate formal debt management plans with payday lenders. They act as an intermediary and distribute agreed affordable repayments. Fees sometimes apply.

03. Informal Repayment Plans

If credit counselling is cost prohibitive and payday lenders won’t negotiate terms directly, self-imposed informal monthly repayment plans help chip away at balances while avoiding additional borrowing.

04. Debt Relief Orders

Those with limited disposable income/assets and payday loan debts under £30k may qualify for a 12 month freeze on collections through a debt relief order while catching up financially. At the end of the 12 months, provided your circumstances have not changed, the debts included in the Debt Relief Order are written off.

05. Taking a Personal Loan

If some base level of affordability can be proven, personal loans from providers like credit unions and community banks offer established repayment terms at lower rates, although still potentially high for those with a poor credit score.

06. Payroll Deductions

Some employers offer voluntary payroll deductions to help repay loans over time directly from a borrower’s wages. This convenient automated option avoids missing payments. Check if your workplace provides such programs.

The bottom line when caught in payday loan debt traps is seeking help early. Multiple practical debt repayment solutions exist with some lender flexibility, effort, and patience.

How to Avoid Reliance on Payday Loans

Anyone currently dependent on payday loan borrowing should develop plans to build emergency savings, strengthen budgeting skills, and establish alternatives for future small-sum financing needs. Some tips include:

  • Live below your means to begin accumulating even small cash reserves that provide a buffer versus running short each month.
  • Where available, leverage employer benefits like advances on earned wages as lower-cost options compared to external lenders when emergencies arise.
  • Explore local nonprofit organisations and charities that may offer financial assistance grants or low-rate community lending programs as payday alternatives.
  • Consult credit unions and peer-to-peer lending networks for potential personal loans with more transparent, fixed charges if you need larger sums.
  • Build your credit history responsibly, manage credit building cards and make payments on time to qualify for reasonably priced financing options.

Above all, break the payday loan dependency cycle by noting upcoming due dates and understanding these products may do more long-term financial harm than good when not used extremely cautiously.

For Sensible Debt Consolidation, Choose Consolidation Expert Today

The team at Consolidation Expert understands how financially debilitating payday loan debt traps become when initial urgency turns into ongoing stress.

While we cannot guarantee consolidation loan approval, we work with an extensive range of lenders that consider all credit scores.

We aim to help applicants strategically consolidate unsustainable debts, stabilise their finances, and rebuild stronger foundations for the future step-by-step. Get the process started and apply with Consolidation Expert.

Representative 14.8% APR

We are a broker, not a lender.

Representative Example: Borrowing £15,000 over 60 months, repaying £355.28 per month, total repayable £21,316.57.

Total cost of credit £6,316.57.

Interest rate 14.8% (variable).

The lenders on our panel offer loans for 12-360 months, with rates from 4.7% APR to 42.6% APR.

The Representative Example is based on all loans paid out by lenders between 1st Jan 2022 and 31st Dec 2022.

Further reading

Read Can I Consolidate Holiday Loans with Other Debts?
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Read How Can I Pay Off My Debts Faster?
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Read Can I Consolidate My Debts Without a Guarantor?
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