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Payday Consolidation Loans

Find out your options for consolidating payday loan debts with Savvy.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on December 22nd, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

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$50,000


Paid in 60 mins if approved*
Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on December 22nd, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

If you have one or more payday loan debts to juggle right now, you may be paying more than you need to in interest and fees for these debts. Because of this, it’s important to know what your options are when it comes to managing these payments, with a payday consolidation loan being one of those. You can learn more about how these loans work and what you can do to manage them more efficiently right here with Savvy today.

What is a payday consolidation loan?

A payday consolidation loan is a personal loan designed to help individuals struggling with multiple payday loan debts. It works by combining or consolidating these debts into a single, more manageable loan. This new loan typically comes with a lower interest rate than the cumulative rates of the individual payday loans, making it easier for the borrower to repay. The primary goal is to simplify the repayment process and reduce the financial burden associated with multiple high-interest payday loans.

Many people choose to take out consolidation loans for a range of different debts, not just small loans. Because of this, you can use one of these loans to bundle other outstanding costs with your payday loans, such as your credit card debt, to potentially lower its interest rate and make it more manageable for your budget.

Can I use a payday loan to consolidate other payday loan debts?

No – payday lenders typically don’t permit borrowers to take out a loan explicitly for the purpose of repaying another loan. Attempting to use a payday loan for debt consolidation may lead to a cycle of debt, as these loans are designed for short-term financial solutions and come with high associated costs.

Instead of using this approach, seeking a debt consolidation loan with more favourable terms, such as lower interest rates and longer repayment periods, can provide a more sustainable and effective solution for managing and eliminating payday loan debts. This way, borrowers can break free from the cycle of payday loan dependency and work towards long-term financial stability.

What are the advantages of taking out a debt consolidation loan for my payday expenses?

There’s a wide range of benefits to using a debt consolidation loan for your payday debts. These include:

  • Simplified repayment: debt consolidation loans streamline the repayment process by combining multiple payday debts into a single loan, reducing the potential hassle of managing various lenders, interest rates and due dates.
  • Lower interest rates: debt consolidation loans often come with lower interest rates compared to payday loans. This can potentially result in cost savings over the life of the loan, making it more financially sustainable for you.
  • Extended repayment period: unlike the short repayment terms associated with payday loans, debt consolidation loans typically offer longer repayment periods. This extension can provide you with more time to meet your repayment obligations, reducing financial strain (although longer repayment periods may lead to an increase in costs).
  • Escape from the debt cycle: by consolidating payday debts into a more manageable loan, borrowers can break free from the cycle of continuous borrowing associated with payday loans. This can help pave the way for long-term financial stability and responsible financial management.
  • Reduced financial stress: the combination of simplified payments, lower interest rates and an extended repayment period can all help to reduce financial stress.

Common questions about payday loan consolidation

What else can I combine into one payment with a consolidation loan?

A consolidation loan is a versatile tool that can help streamline various types of debt. Alongside payday loans, you can typically combine the following into one payment:

  • Credit card balances
  • Personal loans
  • Household and medical bills
  • Buy now, pay later accounts
Am I able to pay off my payday loan debts early?

Yes – you can pay off your payday loan debts early. All such loans in Australia come without early repayment penalties, meaning you can clear your debts early and save money on monthly fees in the process.

How much do payday loans cost?

Payday loan costs vary depending on the size and term of your loan, but those of $2,050 to $5,000 (which you can apply for through Savvy) come with a maximum establishment fee of $400 and interest totalling no more than 48% p.a. This means a $3,000 loan repaid over 12 months would cost $4,347.33 overall, with monthly repayments of $362.28.

Can I use my home loan to consolidate payday loan debts?

While it's possible to use a home loan to consolidate debts, it's not always the most recommended option. Mortgages are secured loans, and using your home as collateral can come with greater risks. If you struggle to make payments, you could risk losing your home. This risk isn’t present with an unsecured personal loan.

Additionally, because this is a long-term loan, you may end up paying more in interest for these debts than you would with a shorter-term consolidation loan. It’s important to check the numbers before you decide on how to cover your debts.

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Disclaimer:

The information on this website is of general nature and does not take into consideration your objectives, financial situation or needs.

For loans between $2,050 and $5,000, the APR is between 21.24% (minimum) and 48% (maximum) per annum. Comparison rate of 65.4962%. Minimum term is 16 days and maximum term is 24 months. The cost of the loan is a $400 establishment fee and monthly interest charged on the amount borrowed. For example, a loan of $3,000 over 3 months with an APR of 48%, (comparison rate of 65.4962%), will have an establishment fee of $400, monthly repayments of $1,225.20. Total repayments of $3,675.60 and total interest payment of $275.60.

Warning: A comparison rate indicates the true cost of a loan. Comparison rates are true only for the examples provided and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate.

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