When payday cash advance consumers are unable to cope with their payments, they usually turn to credit counseling experts for advice. Some of these credit counseling experts receive part of their salary from lenders so many consumers are hesitant to seek help from them because of the issue on conflict of interest. Payday cash advance consumers are questioning the reliability of the advice, whether it is authentically helping or just benefiting the lenders.
Debt settlement has become the most suitable option in dealing with defaults or unsettled accounts over credit counseling. Since the money that these debt settlement companies earn comes from the borrowers payments, there is no doubt that the payment plan they propose is for the benefit of their client. Debt settlement companies profit only when the borrower is able to pay their creditors or payday cash advance lenders. So, their goal is to settle the borrowers debts at any cost.
Aside from the resolution of conflict of interest, debt settlement also give permanent debt relief because debt settlement companies work to help borrowers pay off their unsettled accounts. They do not just offer advice or payment plans, they work for the borrower to get them totally out of debt.
So how do debt settlement companies help consumers in settling their unpaid payday cash advances? Well, these companies act as agents that negotiate with the lender to let the consumer pay his account in small amounts with late fees and additional interest rates waived by the lender.
In a debt settlement program, consumers are given an affordable monthly payment set by the debt settlement company. The new payment plan will be paid by the consumer to the company for 6-12 months, depending how long will it take to pay off the loan entirely. Payments received will be distributed by the company to the lenders owed by the consumer. The debt settlement company receives a portion of the fees which are added to the new payment plan.
In general, debt settlement is a great help for consumers who are struggling to pay off their payday cash advances that have become very expensive because of the late penalties and additional interest rates charged by lenders. However, consumers have been warned against those companies who take advantage of the desperation of consumers to pay off their loans.
Here are some tips for consumers who want to use the services of a debt settlement company:
1. Debt settlement companies charge for their services with a flat fee, usually a certain percentage of the total outstanding debt they are managing for you. However, they are not allowed to charge you an upfront fee unless they have negotiated your unsettle payday cash advance accounts with your lenders.
2. When getting the services of debt settlement companies, make sure they can really help you pay off your unsettled payday cash advances. You need to consider the affordability of the total monthly payment you have to make, the number of installments (in months) you need to pay, and how much you will pay for their services.
3. Before signing a contract with a debt settlement company read the fine print carefully. Check the reliability of the company and do not sign up if it is not registered with the Better Business Bureau (BBB).
Payday cash advance consumers should consider debt settlement programs because non-payment of debts will give you a negative credit report and will surely give you a lot of stress.