Payday Loan Alternatives When You Need Fast Cash
A payday loan can be described as a high-interest short term loan that is an option for people who need money fast. The payment of the loan is done within the next pay periods and you can either authorize the payment through their checking account for direct debit or by using postdated checks. Payday loans don't require great credit score history, collateral, or credit check anybody regardless of their financial position can apply for this kind of loan. Since the loan application process is easy it may land people into awful financial debt cycles that may accumulate and attract high interests which adds to a financial burden to the victims.
They attract a lot of individual who seek to offset immediate financial needs such as bills. People who overly indulge in borrowing Payday loans need to start thinking of other alternative options. It should be made clear to everybody that payday loans should be the last resort. There are several alternatives that you could work with that are more affordable and convenient. It's alright to look at them because you need to practice sound judgment when making any call related to borrowing money.
Let's take a look at a number of payday loan alternatives
Loan from Pawnbroker
One valuable source would be visiting a pawnbroker for financial aid. However, you need to present collateral that will work as security once you fail to honor your contract with the pawnbroker. You can present any form of collateral such as cars, jewels, electronics, and other household items so long as it's below the value of the loan you intend to borrow. Although this alternative requires a form of security its interest rates is much affordable while compared with the one charged in payday loans. It is a good and trustworthy alternative since these institutions are governed by certain government policies. You are not required to present any credit checks other than the collateral. Additionally, the process is easy and quite fast which makes it an ideal alternative. The pawnbroker industry is surrounded by misconceptions with one being that these shops buy your product only at a fraction of the total value and later sell them to people once the loan is in default at a crazy profit margin. It might be true, but such practices were common in the past, but the industry has transformed to kick out some outdated = policies.
Form a lending circle
It is an easy way to get a loan on low or no interest at all. The key is to find like-minded individuals who are driven by one goal of helping each other. Form a lending group with people you can trust with your money. These types of groups are normally a long time and they lend money in circles on a regular basis. The loans you get from such guilds can go a long way in helping you meet your financial needs and obligations without having to worry about high-interest rates and giving out security. The good thing about such initiatives is that you can easily improve your credit score which is a plus for you. The repayment is also done in a less demanding way which gives the members an easy time to service their loans. Since their contributions made your savings may also pay off your loan balance if you meet challenges along the way.
Loans from employers
In some cases of financial difficulty, it is advisable to obtain financial assistance from an existing employer. Employers or companies often provide direct loans to their employees who have worked there for a long time. Some dire situations may trigger individuals to seek loans from their employers. Employers with good and clean hearts will always come through to render the financial aid you might need. If you have any doubts that your organization has such an advantage, please contact Human Resources to resolve this issue.
Apply for a bad credit loan
Some online lenders apply for loans from bad creditors. These lenders have high-income rates, low credit levels, and cannot approve loan applicants. If you are not sure if you are getting bad credit, there is an early opportunity to qualify to see what the lenders can offer you. It won't affect your creditworthiness and prequalification with multiple lenders will allow you to compare loans. Many online lenders fund their products quickly and can add funds to your account the day after approval or after work. Some lenders have increased requirements for applicants due to economic changes caused by tough times courtesy of the pandemic. Additionally, you should be cautious and keen since the financial institutions are reporting defaulting clients to the respective credit bureaus, which in turn affects your creditworthiness and credit ratings.
Loans from family and friends
In general, people can borrow from family and friends which is not something new, but some people avoid this alternative because they fear embarrassment and what their closest circle will say about them. If you a genuine need for money and somebody within your circle is capable to offer you a loan don't shy away. Consult them and ask them to help you on condition that you'll repay them within a specific period of time. If all you need is money, let go of your ego and ask for help. The main benefit of this option is that you don't have to pay any interest on your family members. On the other hand, if your friend or family member decides to come through on condition that you have to pay an interest take the offer since it will be much affordable compared to the rates you have to pay when you secure a payday loan.
Ask Credit Unions
They are also known as cooperative financial institutions and they also specialize in providing loans to their members. For you to qualify for a loan you need to join them and save regularly. You stand to benefit once you meet their requirements. Loan applications are made and approved locally which saves you money and time. The loans from credit unions are more flexible compared to loans offered by large corporations. There even credit unions that offer signature loans to loyal and consistent clients with good credit. Since these institutions are much smaller, they tend to provide fast and quality services to their clients. The credit unions are governed by the relevant bodies that help come up with policies that favor both the unions and their clients. The interest rates are standardized so that members can feel safe while securing a loan.
Get a loan from your savings account.
If you have an emergency fund or savings account, this is the one to use. Otherwise, here is a new product just for you! Starting with a small amount per week can go a long way in the event of a surprise and be a lifesaver in times of financial hardship.
Negotiate the repayment with your lender.
If you are sure that you will not be able to make a payment on time and you think you need to renew, call your lender or Credit Company, and request an extension. You can negotiate a new payment plan that suits your financial situation. It may come as a surprise, but there are plenty of lenders willing to work with you.
Instead of borrowing a payday loan, it sounds much better to visit the bank and ask for an overdraft. The bank will come up with a plan that will require you to pay the amount plus interest. You might incur some charges such as the arrangement fee, administration charge, and the monthly fees. However, it is important to think of ways of repaying the overdraft so that you maintain a good relationship with the bank in case you'll need a similar favor.
Ask for A Due Date Extension
Currently, we are going through tough economic times due to the advent of the pandemic. The effects have been felt by all financial sectors as well as individuals. In such a scenario, you can talk to your landlords, utility companies and lending institutions to rethink of a strategy that seeks to give you more time to make your due payments. The above parties mentioned can come up with moratoriums, reduced rates, and tariffs to help an individual meet their expenses in a convenient way considering the economic turmoil. People and institutions are understanding and coming up such considerations will deter most individual from borrowing money.
Remember, payday loans are simple and fast to access but they are expensive since they have expensive rates. Payday loans should be the last resort since they cause financial burden and stress to many needy individuals. It is ideal to look at a close alternative that suitable and ideal for you. If you realize that you are a victim of constant borrowing it would be the ideal time to talk to a money coach or credit counsellor. They will give you valuable insight on how to manage your finances so that you could avoid the temptations of borrowing.