Four Alternatives to Payday Loans
May 30, 2010 by admin
Four Alternatives to Payday Loans
The economic slump is almost over but there are still traces of its effects everywhere. The unemployment rate, which began in 2008 and peaked in 2009, still has to be completely addressed until today. Even as more businesses have opened and the global market continues to grow, people are still at a loss in figuring out where to find a stable job to provide for themselves and their loved ones. In addition to the unemployment issue, the cost of commodities are something people have difficulty facing with today, and those who were fortunate enough to keep their jobs during one of the world’s most difficult times still have to contend with very high prices of goods and services.
The effects of the crisis have left people in tough financial situations, and many of them have sought the help of payday loans to make ends meet. However, as convenient and easy as this loan may be for most of us, there are other alternatives that you can use to loan money from, especially if you are under no urgent or emergency situation.
1. Creditors
Consumers can negotiate with their creditors for payment plans if they are having difficulty paying off their mortgage or other loans that they have. Creditors are more than willing to restructure your loan especially if you have established a good business relationship with them, and this option offers considerably lower rates.
2. Family and Friends
If possible, borrow from people you know and trust. That way, you will not even have to deal with any interest rates and fees at all. If family and friends have the means to lend you money, do not be afraid to approach them. Just make sure to pay them as soon as you can.
3. Credit Cards
Having a large credit limit may actually be to your advantage because this allows you to borrow money via their cash advance option, which is usually 30% to 50% of your credit limit. Credit card companies charge a standard fee for the cash advance transaction, plus interest rates but this is more often than not lower than that of payday loans.
4. Employer Cash Advance
Many companies provide an option for their employees to borrow money during times of emergency. Check with your Human Resource Office to see if this is available in the company you work for. Usually, they do not charge any fee for a loan, and payments are deductible from your salary over a pre-determined duration.
If the above options are not available to you, then you can always choose to avail of a payday advance. Although there have been lots of negative publicity on payday advance loans, as long as you pay in full and on time, there is really nothing to worry about when getting this short-term loan.