Alternate Options to Payday Loans
Payday loans are a good source of emergency cash especially when you have poor credit score or lack credit history. It is almost impossible to ignore a payday loan store when you are in need of emergency cash.
However, there is the other side of payday loans that isn’t good. The interest rates are absurdly high and the
repayment period is short. A payday loan is a solution to a short-term crisis that plunges you into a long-term nightmare. The good news is that there are better alternatives to get a quick loan.
No matter what you need the emergency cash for; you can always turn to the following options;
Online Personal Loans
A personal loan is a smart way of getting quick cash. The personal loan provides a longer repayment window, and you will be paying back the loan in installments. The cost of borrowing is also reasonable.
There are several ways of getting a personal loan. Your first consideration should be your local bank where you are known. If you fail to secure a personal loan from your local bank, then you can consider a credit union as your next option. Peer-to-peer and online lenders are also excellent options when you are seeking a personal loan.
The online and peer-to-peer lender tend to be less strict, but they offer lower amounts compared to the banks and credit unions. However, it is worth noting that your credit history plays a critical role in determining whether you are eligible for a personal loan or not.
Pawn dealers are good lenders if you have something of value that can be used a collateral security. Most pawn
dealers aren’t interested in your credit history since they retain your asset until the day you repay the loan entirely.
Their interest rate is usually fair, and you can always talk to the pawn dealer to extend your repayment period. However, the interest rates vary from one location to another so make sure that you confirm the cost of borrowing with your specific dealer before signing the agreement.
Credit Card Cash
A credit card is also an excellent alternative to a payday if you need to pay for something quickly. You can
always charge the purchase directly to your credit card. For example, if you need money for an expensive AC unit repair, don’t go for the payday loan but instead, charge it on your card.
You will discover that some cards even offer a grace period before you start repaying the loan. If you need cash, then you can get a cash advance from your credit card and withdraw the amount via an ATM. However, just like the other loan options, credit cards tend to have limits on the amount of cash you are allowed to borrow against the card’s balance.
Short Term Loan
A short-term loan is any type of loan that you will be required to repay it within one year. Short term loans are
offered by banks and other financial institutions. Even if you aren’t eligible for a personal loan, you may still be successful in getting some cash from the bank when you apply for a short-term loan.
An example of a short-term loan can be cash advance in which the payment will come from your bank account on your next payday.