Here are the 4 Best Payday Loan Consolidation & Relief Companies

From payday loans to credit card debt, most Americans owe money in one form or another.

In 2022, U.S. consumer debt hit $16.51 trillion. Juggling multiple high-interest payments can leave many borrowers struggling to stay afloat.

Wouldn’t it be great to consolidate them into one single loan with one monthly payment? You can. Here are the best companies to help you do it.

Do You Need Payday Relief?

Get lower payments and immediate cash relief with a payday loan consolidation program.

Disclaimer: Credit Summit may be affiliated with some of the companies mentioned in this article. Credit Summit may make money from advertisements or when you contact a company through our platform.

Legitimate Payday Debt Loan Consolidation Services

In the world of short term lending, you need to watch out for scams. We’ve done the hard work for you and picked four legitimate debt relief companies and one online lender that can really help you.

1. DebtHammer (Top Pick)

DebtHammer offers payday loan relief and is our top pick for those with debt problems.  

The company only works with clients that they can help, and it costs nothing to get a consultation. First, they will examine your loan and the payday loan company that issued it.  

If it’s a lender they can help with, they will set you up with a 12-month payment plan and walk you through the process of how to work together. They stop lenders from automatically drawing from your checking account, which reduces overdraft fees. Next, they inform the lenders and any collection agencies the lenders hire that DebtHammer represents you and that all contact must be through them.  

They do not charge an annual percentage rate  — the fee is flat and predictable. If you need payday loan help, schedule a free consultation — there’s no obligation.

DebtHammer also offers a blog with useful content that can help you regain control of your financial situation, ranging from quick ways to earn money to a list of resources for people who need immediate financial help.

They have 4.6 out of 5 stars with the Better Business Bureau, where they’ve earned an A rating. On Trustpilot, they have 4.8 stars out of 5.

2. InCharge Debt Solutions

InCharge Debt Solutions | Credit Counseling, Debt Consolidation

InCharge Debt Solutions is third on our list only because they don’t specialize in payday loans like the first two. However, if the circumstances are right, they can really help. InCharge is a 501(c)(3) non-profit that offers both credit counseling and debt management programs. They are accredited by the Better Business Bureau.

3. Consolidated Credit Solutions

Consolidated Credit is one of the largest nonprofit credit counseling organizations in the U.S. The credit counseling team will work with your creditors to lower interest charges, reduce or stop penalties and establish an affordable repayment plan. The company says that it can typically reduce interest rates to between 0 to 10%. You will start off with a free consultation with a credit counselor to review your financial situation. They are accredited by the Better Business Bureau.

4. Lending Club

Lending Club is a peer-to-peer lending platform that offers all sorts of loans, including debt consolidation loans. So this would be the do-it-yourself payday loan relief program.

The difference between Lending Club and other lenders is that Lending Club is a peer-to-peer platform, which means that other individuals are deciding whether to lend you money or not. You must have a 650 FICO or higher to qualify (yes, this means a credit check). Lending Club does a decent amount of vetting applicants and assigns them a grade before it allows individuals to see whether you’re eligible.

Unfortunately, the high FICO score requirement makes it difficult for most payday borrowers to use Lending Club, but if you can, you’ll likely get lower APRs than other debt consolidation options.

How to Choose a Payday Loan Consolidation Company

Choosing the right service is essential to escaping the payday loan trap and getting back to financial freedom. Here’s how to do it.

  1. Compile your loan information.

    The first step is compiling all of the information that a payday loan consolidation company is going to ask for. This includes loan amounts, how often you’re paying each lender and how much, loan agreements, and relevant banking information. This will speed up consultations and allow you to make an informed decision. Remember, not every company can work with every lender. So, having this information ready to go ahead of time allows you to ask your debt advisor about each lender that you owe.

  2. Do your research.

    After Googling “best payday loan consolidation companies” or “best payday loan relief companies,” contact the companies that are listed in the top three on each list in the results on the first page. Look at every website in the top ten, not just the first website you see! After compiling your list of target companies, quickly Google their reviews. Immediately eliminate any services with poor reviews.

  3. Compare rates, but more importantly, compare the value each service provides.

    Don’t be tempted to go with the cheapest option. Ensure that your provider of choice is licensed to operate in your state, uses an FDIC-insured third-party savings account, doesn’t charge upfront fees, and has multiple years of experience negotiating with payday lenders. On top of that, verify that the company has a relationship with your lenders and can enroll ALL of your payday loans.

  4. Make your choice and follow up once a month to check in on the progress being made

    Be proactive. Select the best option and check in once a month to make sure that the money in your dedicated savings account is still there and that the company you’ve selected is making progress in negotiating better repayment terms. You’ll thank yourself later if you are proactive even AFTER hiring a company to negotiate for you!

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How Does Payday Loan Consolidation Work?

Just like any other form of debt consolidation, payday loan borrowers will add up the total of the debts they need to consolidate, and look for one bigger loan to roll it all into one monthly payment.

Debt consolidation involves taking out a new loan to pay off a collection of smaller loans. This groups together (or consolidates) the total amount of all of your previous loans so you can focus on repaying one single loan. Typically, loan terms are more favorable when you do this, resulting in lower interest rates, lower monthly payments or longer repayment terms.

Debt consolidation isn’t limited to payday loans. Other unsecured debts can also be consolidated. This includes credit card debt, medical bills and student loans.

While you may have the option of consolidating your loans, it usually only makes sense if you receive a lower interest rate. Be wary of consolidation companies that only offer lower loan payments or longer loan terms, as this can keep you in debt longer

READ MORE: Payday Loan Consolidation: How to Get Relief that Works

How to Consolidate Payday Loans in 6 Simple Steps

If you’re considering debt consolidation, here’s what you need to do to set yourself up for success.

1. Assess Your Situation

It may be unpleasant, but sit down with your bills and calculate exactly how much you owe. If your debt is on the larger side, you probably won’t be able to use balance transfer credit cards or Payday Alternative Loans.

2. Check Your Credit Score

Pull your credit reports and review your credit scores. Look for free sources of your VantageScore and FICO. This will give you an idea of which loan options could work for you.

3. Research Your Options

Research potential lenders. Prequalification will help you determine interest rates and calculate monthly payments without dinging your credit score. If your credit is less than ideal, check out some peer-to-peer lenders.

4. Complete the Application or Select a Professional Program

After you’ve decided how to proceed, you’ll officially apply. You’ll need to provide your Social Security number, proof of employment and in some cases, documentation of your existing debts. The lender will run a hard credit check to assess your creditworthiness. Then wait for a decision. In some cases it can be immediate. In others, it can take a few days.

5. Wait

It can take anywhere from a few minutes to a few days to learn whether or not a loan application has been approved. After that, funds can either be sent to you in the form of a check or directly deposited into a bank account, which will be faster.

6. Pay off Your Payday Loan Debts (and Any Other Debts You’d Like to Consolidate)

After the loan is funded, you’ll use the funds to pay off your payday loans. Some lenders will do this on your behalf. Make sure to confirm that your balance is zero.

What are the Pros and Cons of Payday Loan Consolidation?


  • Single, straightforward monthly payment
  • No hidden advance fees
  • Far lower interest rates
  • No more unauthorized automatic debits
  • No ‘gotcha’ fees like late fees and others in the fine print
  • Fewer harassing calls from collectors (or none at all)
  • Lower chance of a lawsuit
  • Escape the debt cycle


  • You need to avoid any future payday loans
  • You must follow the advisor’s advice

In summary, assuming you pick a reputable firm to work with, the downsides are minimal. Who loses? The payday loan company. And that’s something we can all celebrate.

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Does Debt Consolidation Hurt Your Credit?

Yes, it does, but the damage to your credit score is only temporary.

Some methods will impact your credit score more than others. Balance transfer credit cards, debt consolidation loans and Payday Alternative Loans will knock your score down a bit because the new loan will change your available credit and credit utilization ratio, both of which are used to calculate your overall score. However, as you consolidate your debts, your utilization ratio should decrease and your score should start to rebound.

A debt consolidation company could have a longer-term impact on your credit score, particularly if the company tells you to stop paying your bills while they negotiate with creditors. This can affect your credit score for up to seven years. But if it is your best option to fix your financial situation, it can be worth it.

Eventually, as you pay down your consolidated debt, your score will recover and will probably improve.

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More Options for Payday Loan Debt Relief

There are other financial services that exist for borrowers looking to consolidate their payday loans. Including:

Personal loans: Personal loans are installment loans that are taken out from anywhere from six months to several years, usually from a bank or credit union. Most personal loans are unsecured loans, which typically require a credit score of at least 600. There are secured personal loans for those with credit scores under 600. These require some sort of collateral — a car, or home, for example.

READ MORE: Best personal loan options

Home equity loans or lines of credit: Home equity loans and home equity lines of credit (HELOCs) are two ways to borrow against your home. If you own a home, borrowing against it will result in a much lower interest rate than a payday loan. The difference between a home equity loan and a HELOC is that a home equity loan results in a one-time cash outlay. With a HELOC, you can borrow up to as much as you please.

READ MORE: What is a second mortgage?

Credit counseling/Debt Management Plan: Another method you can try to get rid of your payday loans is credit counseling. You can often get a free consultation from a nonprofit credit counseling service near where you live. Credit counselors will also set up a debt management plan (DMP) to help borrowers address their financial situation and pay off accrued debts. Also sometimes called a debt management program, a DMP consolidates all of a borrower’s existing loans together into a single debt with a lower interest rate, making payments more manageable. Borrowers have to work directly with their lender to see if they’ll offer this option though. This can be a great way to repay your debt on your terms if they do.

Pro tip: The truth about payday loans — payday loans are short term, high-interest loans that are repaid from your next paycheck. The loan amounts are small, but the qualification requirements are minimal. All you need is an ID, a bank account and proof of income. You can even get a payday loan if your only source of income is Social Security. The fact is that most payday loans will leave borrowers in a worse financial spot than when they took out the loan. For that reason, it’s best to exhaust every other possible option before turning to a payday lender.

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The Bottom Line

If you’re struggling with debt, you have options. And debt consolidation can offer a way out of the debt trap. Don’t be afraid to ask an expert or two for advice.


Can You Settle Payday Loans?

This depends on the lender. Some lenders will reduce your debt if you ask them. Other lenders have firm no-settlement policies.
No matter who your lender is, it does not hurt to ask. For your best chance at settling your debt, you need to make a strong case to the lender that you will not be able to pay. The lender needs to think “it’s better to get some money than no money.”

What is the Best Payday Loan Consolidation Company?

Our pick for the best payday loan consolidation company is DebtHammer.

Can You Go to Jail for Not Paying a Cash Advance Loan?

No, you cannot go to jail for not paying a cash advance, payday or any other type of loan in the United States. For more information, read this article. Debtors prisons are no longer legal in the US. However, if you receive a court summons and fail to appear, you could be charged with a misdemeanor of failing to appear in court. This is not the same as going to jail for not repaying a loan.

Do Payday Loan Consolidation Companies Work?

The short answer is yes, as long as you choose a legitimate company and stick to your payments – it’s not a silver bullet.

Whether you work with a payday loan consolidation company or take out a loan, you are taking a step out of the debt cycle and will likely reduce your total amount. But you still need to stick to the plan.  Read more here

When I Consolidate Debts, Where Do My Payments Go?

If you’re working with a payday debt consolidation company, you’ll make a single payment into a third-party dedicated savings account once or twice per month.  
If you’ve taken out a consolidation loan, it’s up to you to use that money to pay down the lenders. Then you’ll make loan payments until you pay back the new loan.

Do I Need Good Credit to Consolidate my Payday Loans?

This depends.
For payday relief programs or debt resolution plans, they may or may not need to check your credit report before putting you on a program. 
To qualify for a debt consolidation loan, however, you can bank on a credit check being required.

Will Payday Loan Consolidation Reduce the Amount I Owe?

Yes, if done right, any PDL consolidation program should reduce both the total amount owed and the effective interest rate you will be paid. You can ask the firm upfront to show you the before and after enrollment amounts.

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