Payday loans are very popular with people who need immediate money, even you have a bad credit score. Despite how easy and quick you can get cash, there are reasons why you better look for alternatives instead of payday loans.
If you are thinking of taking the short-term, high-interest loan, you should know by now that it comes with high interest and fees. It charges you 400 percent annual percentage rates.
Not to mention that lenders can automatically have access to your bank account, can trap you to debt, and worst can never repay. Rather than taking a cash advance, why not use these 7 options?
Borrow from family and friends.
The benefit of borrowing from someone you know is that they are more likely not to charge you interest. You can request them that you are repaying when your budget allows.
Unlike borrowing from a credit card that can still pressure you when your due date is approaching, borrowing from family and friends can be less stressful. If you know how to manage your credit, you are able to pay them on time without harassment or getting into issues.
Borrowing from lenders can put you to the pit of debts. Without realizing it, you would be charged with ballooning fees that make it doubly hard for you to repay.
Use credit cards.
If you have a credit card, using it can ease your financial burden. You can use it to buy or pay something that you really need.
Although it is still not the best option, it offers lower interest rates than cash advances. The average interest rate of credit cards is 17.25 percent. In order to avoid possible issues, just settle your bills before they are due.
Borrow from your employer.
One of your options, when you need money, is to ask your employer if you can have a pay in advance. Some companies offer this as one of their benefits.
However, in case you don’t have, why not talk to your boss and ask for it? This way, you can just work for the cash advance to pay it while it doesn’t earn interest and charges.
Use an authorized overdraft.
When the bank allows you to withdraw even the account has no funds is called overdraft. Just like any loans, it earns interest. You will also be charged for an overdraft.
A typical fee for overdraft is $35. It protects you from issuing bounced checks and allows you to pay bills even it reaches zero. Since the charges are lower than the charges of a credit card, it is a better option than credit cards.
Make sure that all overdrafts are authorized. If not, you’ll be in big trouble because it can cost you a lot.
Borrow from a social fund.
Another solution for emergencies is to get money from a social fund if you have these benefits. You can get a loan without interest.
You can also inquire about the local welfare assistance scheme in your area. This is a big help when you need assistance for your daily living such as clothes, heating, and food. If you want to learn about it, you can check your local government because if they are giving pre-payment cards, vouchers, food banks, and alike.
Get a personal loan.
If you need instant money, one way to get it is to apply for a personal loan at a bank, an online lender or a credit union like HFS FCU where you can apply for a personal loan in Hawaii. It’s one option that you can take if you are declined by a credit card company.
Unlike payday loans, personal loans give you the freedom to pay it in installments over a long period of time. This way, you can improve your financial status without getting pressured to pay on your next paycheck.
However, take note that it is only advisable if the APR is reasonable. Some are not strict when it comes to requirements, so you have a better chance of getting this type of loan.
Negotiate a payment plan.
Lastly, you can talk with the company you owe your bills to if they can give you an extension or a different date to settle your bills. You can negotiate with them a later date that is easier for you to pay your medical bills, utility bills, or rent.
Be honest with the person or the company if you need some extension to pay your dues. Sometimes, they approve this by offering you a convenient payment plan.