The answer is a resounding yes! Any service that can reduce your interest rate from between 200 and 700% down to 0% is doing a great job. Payday loan consolidation is absolutely the way out!
If we look at the interest alone, you can see that using these loans should be a last resort. For example, if you were to borrow $1000 and had an APR of 25.99%, your interest in 30 days would be approximately $22.31. That is because these types of loans use compounded daily interest. While this amount may not seem like a lot realize that a 25.99% APR from a payday loan company is not happening. Most have interest rates up to and including 200%-700%. Now do that same math using an APR of 200% and in one month you are paying $178.14 in interest, and that’s not even paying toward the principal borrowed. Yes, 200% APR is ridiculous, but since the same laws do not govern payday loan companies like banks and other lending institutions, they can get away with their loan shark type interest rates.
That is why states like North Carolina have made it illegal for payday loan companies to operate within their state, to protect their citizens from unscrupulous lending practices. Therefore, until payday loan companies can be regulated the same as banks and dare I say credit card companies, people should be of the opinion that payday loan companies are not an option. with loans of this type, it is important to have a healthy financial knowledge of the type of debt being accepted and the ability of the person to pay it off in a timely fashion.
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