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How do I consolidate my payday loans? Find out here!

Stressed over multiple loans and wondering how do I consolidate my payday loans
Stressed over multiple loans and wondering how do I consolidate my payday loans

Payday loans are known to be especially useful when you need to pay for urgent expenses but you haven’t received your next salary yet.

For example, you want to sign your child up for extra tuition classes nearing the end-of-year exams, but don’t have enough cash on hand to pay the deposit. Payday loans can tide you through this situation and get your child’s education needs fulfilled.

However, when you start taking multiple payday loans, it can be difficult to keep track of all your debt. This is when you might need to consolidate your payday loans – yes, into a single loan so it’s more manageable. Read on to find out how you can do so!

What is a payday loan?

A payday loan is a one-month loan that gives you cash with the aim of covering urgent financial needs. You can think of a payday loan as a salary advance which can be used to pay off urgent bills or expenses that may incur penalties if not paid for by the deadline (and by the time your salary comes in, it might be too late).

As the name suggests, this loan usually needs to be repaid on your upcoming payday or exactly a month after receiving the loan.

A payday loan with a licensed money lender is easy to acquire as all you need is a stable income and a bank account. However, unlike other loans which may offer 2-3 times your monthly salary or more, a payday loan is typically capped at one month of your salary.

What is a debt consolidation loan?

For those of you who might have multiple loans and debts from different lenders, it can be stressful trying to keep track of different repayment deadlines and repayment amounts. A debt consolidation loan lets you combine all your debts with different lenders into a single one, often at a lower interest rate which helps you save money in the long run.

This can be useful when consolidating loans that have higher interest rates, such as payday loans.

Why should you consolidate your payday loans?

1. Easier to keep track and manage

When you have multiple payday loans from multiple lenders, keeping track of all repayment schedules and interest rates can be a real headache. If you miss a payment deadline, you incur penalties like late interests and late fees.

A debt consolidation loan combines all your debts into one single loan, which makes keeping track of your debt easier and less stressful. Also, you can plan out your budget with more clarity as you only have to pay off the one consolidated loan instead of several different ones.

2. Spread out repayment period

Payday loans are typically paid for in a month or less. If you have multiple payday loans that are due in the same month, consolidating all these loans can help you spread out the repayment period. For instance, instead of repaying all of them in one month, the debt consolidation loan may offer you a more manageable loan tenure.

The longer the loan tenure, the less you have to pay monthly. This decreases the chances of defaulting and prevents the accumulation of late payment fees. A longer tenure, however, means that you may be paying more interest in the long run.

3. Lower interest rate

Consolidated payday loans tend to have a lower interest rate than separate payday loans. This means you might be overall paying less for your loans if you choose a loan tenure that isn’t too long.

4. Get out of debt more easily

As it is more manageable to repay the consolidated loan than separate payday loans, you also stand a higher chance of getting out of debt more quickly and easily.

However, do your budgeting well: Debt consolidation loan is still a loan
While consolidating your payday loans may help you clear your debt, do take note that it is still a loan. Make sure your budgeting and financial management is done well to avoid missing repayment deadlines (which would lead to high late interest and late fees).

Licensed money lenders can charge late interest rates of up to 4% per month on the amount that is repaid late, as well as a late fee of up to $60 for each month of late repayment.

How can I consolidate my payday loans?

Simply apply for a debt consolidation loan with us like any other loan from a licensed money lender:

  1. Fill up our online application form or call us or walk in to our office
  2. We will contact you with the request for necessary documents as soon as possible.
  3. If you have not visited our office previously, we will need you to come down for a face to face verification and to submit the necessary documents (such as your IC, proof of employment and proof of income).
  4. Once the loan is approved, you can then sign the loan contract. Before signing, do make sure you agree to all the terms such as interest rates and loan repayment schedules.
  5. Cash will be disbursed to clear all your debt from other loans. This means you will only need to repay a single loan with a single repayment schedule with us.

Want to consolidate your payday loans or any other loans? For competitive rates and a streamlined, professional service, apply for a debt consolidation loan with R2D Credit now.


The information provided on our website is for educational and informational purposes only and is not intended to be a substitute for legal or financial advice. While we try to ensure that information on this website is accurate, we do not warrant that the information will be free from error. We shall not be liable for any loss or damage that may arise from the use of this website.

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