How Do I Consolidate My Payday Loans?

Payday loans are easy to take out, and many companies offer them. They also don’t do a credit check when considering whether to approve an application or not, so there is no way for them to know whether an individual is already in a lot of debt or not – essentially, there’s nothing from stopping you from taking out a bunch of payday loans. It is helpful at the moment, but what happens when it becomes too much to handle?

Consolidating payday loans involves merging several payday debts into one easy-to-manage payment plan. Typically, this is achieved by obtaining a new loan with lower interest rates. This allows the borrower to pay off their current payday loan debts. Consequently, the borrower can pay off the existing debt more effectively and easily, avoiding excessive fees and penalties from multiple lenders.

Discover how to consolidate your payday loans.

Line of credit

If you can work with a bank to open a line of credit, you could use that to pay off your various payday loans. Lines of credit are typically lower in interest, and it is revolving debt, so you can use the space you make when you pay it off.

It also is a good option because it won’t negatively affect your credit, as long as you keep it in good standing and make payments on time.

Consolidation loan

Banks often offer consolidation loans, where they will lump all of a person’s debt into one loan, which is paid off in regular intervals (once a month or once every two weeks) for a longer period. These loans can be very helpful when people find their debts are spread too thin.

One drawback, however, is that they will consolidate all of a person’s debt, which means credit cards, payday loans, and other debts. They will subsequently force cancellation on almost all credit cards involved in the consolidation, usually except with their bank.


Although not a consolidation method, it is a known method for managing debt to help individuals feel less overwhelmed. The snowball method is tackling the smallest debts first while making minimum payments on the others and working your way up to the larger debts.

Although payday loans should be paid in one bulk sum, if you’ve already defaulted on the loan, it might be best to tackle repayment in this way, even if it does ultimately mean losing quite a lot of money to interest in the long run.

In this case, it might also be helpful to analyze the interest rate and the size of the loan and pay off those smaller but have higher interest rates.

A larger payday loan

Depending on the size of your multiple payday loans, you might be able to take out one or two larger payday loans to consolidate several smaller ones. This will also buy you some time as you try to find the cash to pay them off.

Doing this may be difficult because many payday lenders only offer small loans. However, if you can make it work, it is better to have one or two loans instead of several.

Home equity loan

Another type of loan that could help you pay off multiple payday loans is a home equity loan. This loan is a type of second mortgage that borrows against the equity in your home. This could be a plausible and inexpensive way to consolidate payday loans if you own a home.

Learn your options

Payday loans are intended to be paid back in a lump sum on the due date, but they are also prepared to handle things for those unable to pay. Your best bet is to contact them before your loan defaults and explain that you will be unable to pay on time due to unavoidable circumstances. The customer service representative may assist you in finding another solution.