If you are considering getting a payday loan, then you obviously want to get cash quickly.
Before you borrow money with a payday loan which can have finance charges higher than
$150 for a $500 loan, you should consider a number of alternatives.
One option is to take out a cash advance on a credit card. Be sure to learn the interest rate
that the credit card company charges for cash advances, but it is sure to be much lower than
the finance charges on a payday loan which can work out to over 800% interest when
annualized. You will also be able to pay off the credit card cash advance by making monthly
payments, rather than have to pay the entire balance on your next payday. Furthermore, if you
need extra time to pay off the credit card cash advance, you will not be subject to the kind of
exorbitant fees incurred by “rolling over” a payday loan.
Many people resort to getting a payday loan because they have poor credit and they assume
they would not be approved for a loan at their bank or credit union. This is often not the case.
You may have some strikes against your credit, but your credit could actually be considered
moderate. Additionally, if you have lived at the same residence for a while and have a
reasonably stable employment history, you have an even better chance of being approved for
a loan at your bank.
If you are fortunate enough have an employer that offers loans to its employees, you should
consider this as an option. The interest rate you will pay will be even lower than that of your
credit card, and your credit history will probably be less of an issue than with a traditional
lender.
Borrowing money from family or friends is a sensitive subject with many people. You would
indeed be wise to use discretion when borrowing money from those close to you; it really
depends on your relationship with the person. Both parties should agree ahead of time how
and when the loan is to be repaid to avoid any misunderstandings or hard feelings later.
Whichever means you use to get a loan, be sure to know the interest rates and terms of the
loan. Find out about any finance charges you will incur, and if you need to extend the loan
beyond the original payment period, what kind of fees will you have to pay.
If you have explored all your options and find that you must resort to getting a payday loan, the
same rules apply - know the details of the loan including fees and repayment terms.
Compare several lenders and choose the one that offers the best deal for you. And always
work to improve your credit so that you will eventually be able to find a better source of money.
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