Merchant Cash Advance Consolidation is the Right Solution
A cash advance is a form of short-term debt that is borrowed in a financial emergency or when a borrower cannot get a loan from a conventional institution. There is no collateral involved and these are unsecured loans. While cash advances have their benefits, they also come with some terms and conditions. First of all, they tend to be quite expensive, with annualized interest rates going into three figures! Your repayment amount could easily double in 3 or 4 months time. Lenders also require cash advances to be repaid in a month or so, as they are short-term solutions.
Often times, when a borrower has drawn multiple cash advances, the repayment becomes difficult. There are also times when the repayment date of multiple cash advances falls on the same day. It becomes almost impossible to repay all those cash advances in such a situation. As a makeshift solution, a borrower pays only the interest component in such cases and extends the loan. Over time, the interest-on-interest keeps piling up as the borrower keeps extending the loan and a negative cycle starts to emerge.
Advance Consolidation as a way to get out of Cash Advance Debt Cycle
One way to get out of this cycle is consolidation. Companies like Payday Loan Helpers are professional consolidation companies that can offer you the most optimal solution. A consolidation company has a team of professionals who can help you lower your monthly payments. The company can negotiate with the lender on your behalf and ask the lender to lower the fees and interest rates. Additionally, depending on your state, the local laws may require a cash advance lender to allow gradual repayment of the dues in case you are struggling to make full repayment. Negotiators can speak directly to the lender to make sure that you get that option of gradual repayment.
The goal of a cash advance consolidation company is to make your loan more affordable. Lower and more feasible repayment amounts will allow you to catch up and clear your dues. Payday Loan Helpers can also assist you in creating a repayment plan that takes into account your financial situation and cash flows.
Some good reasons for merchant cash advance consolidation :
- High interest rates – Cash advances come with very high interest rates, ranging from 60% to 300% annualized. Such high interest rates can put a lot of stress on your paycheck and cash inflows.
- Improving your credit – Cash advance firms do not report your repayment record to credit bureaus. However, if you find a consolidator who will pass on the repayment records to the credit bureaus, then your credit record will improve. This aspect is especially true if you have drawn a merchant cash advance. Your business credit record will receive a much-needed boost.
- Lengthening the term – A cash consolidation company will negotiate a payment plan with your lender and allow you to repay the dues over a longer period of time through refinancing.
- No need to take harassing calls – Cash advance lenders use debt collecting agencies to recover money in case of delayed payment or default. Since cash advance loans are unsecured, the lenders tend to be quite aggressive in their recovery efforts. If you work with a consolidation company, the company will negotiate directly with the lender and you will not have to take harassing calls at work or at home. Working with the right partner can give you some peace of mind.
- Fixed Repayment Terms: Unlike credit card or a conventional loan, which specifies a fixed monthly payment and allows for gradual repayment, cash advance requires repayment of the full amount at a time.
Selecting the right consolidation partner is key in your effort to get out of a debt cycle. Make sure that your cash consolidation company has a good track record. They should have at least 5 years of experience. If they are listed with websites like Better Business Bureau, then that is a plus. Look for associations with industry bodies and regulators. Read the reviews of the company. Choose a reliable partner who will work closely with you on this journey of consolidation.
You can get more info by filling out the form below, and one of our experienced professionals can help you handle the complex negotiations in a stress-free manner. Feel free to call us and speak directly about how you can consolidate your cash advance loans.