Some of these companies consider these payday loan consolidation systems as debt settlements. What happens is that when you do make your regular repayments a consolidation company may keep these payments for a period ranging from two to three months and try and negotiate a payoff with the loaning company. This is not a very good idea as it could work against your best advantage while the payday loan consolidation company should work to help you pay back your loan. This strategy also places the payday loaning company in a defensive situation and will make it less likely they will want to negotiate at some point in time with your consolidation company and re-establish a refunding plan.
There are some consolidation companies that use the money you pay the first few months to pay their own fees and only then do they start paying the loaning company back. They will also be less willing to take a reduced amount of money from you when they initially gave you the storefront loan you requested.
The whole point of a payday loan consolidation company is to help you with a dedicated program pay back other payday loaning companies and get you out of this type of debt, especially if you have more than one payday loan and cannot come to terms with the bad financial situation. Adding stress to an already difficult situation will only make things worth; this is why it is important to find a professional and reliable consolidation company.
Payday loans consolidation companies that are professional will work for you actively and aggressively in order to solve your debt problems and fix the financial impasse as soon as possible. This means that as soon as you have started making payments to them they have probably already, if not completely solved, at least have negotiated the new re-payment plan, which will be based on the amount you are paying them. In these cases loaning companies will be more likely to work with the consolidation company to find the best possible solution, for they see a chance to have their loan paid back.
Before approaching a payday consolidation company you should carefully research one that will provide the best service and give you the best value for your money.