Payday Loans Substitutes You Can Consider
Payday loans are great, urgent solutions suitable for desperate, emergency situations. According to Wikipedia, they can be described as fast, short-time, high-interest, small-amount credits that are provided by cash, against credit cards. These loans that are often called cash advances, are required by the households by the end of the month, before the planned and anticipated wage payments.
Meanwhile, being the fastest and the easiest to get, short-time loans are the most expensive, coming with high-interest rates. Quite naturally, the rate offered to you by the certain lender depends on your credit score and history. However, this perfect solution is suitable only for the urgent necessities and it is highly recommended to look for the alternative money sources before applying for a loan.
The Best Payday Loan Alternatives Available in the USA
- Personal loans that are called installment ones are provided by multiple banks and credit unions. As well as payday loans, they are unsecured by nature, requiring no collateral, but, they are more beneficial in terms of:
The borrowers can apply for a personal loan online and the application process is quite simple. The loans commonly come with the fixed interest rates that make about 6-15% APR, but the deal conditions are to be met, no delay is permissible.
- minimum repayment period (90 days);
- lower interest rate;
- possibility to pay the money back by small monthly installments;
- limited number of renewals allowed.
- Paycheck Advances are great opportunities for large corporations’ and small companies’ employees. You are to ask your employer that is the business owner about the advance directly or through the human resources department. When the reason for the application is evident, the advance is commonly granted willingly, imposing no interest. Thus, this option is quite beneficial for various workers. Meanwhile, it’s incredibly important to follow the company practice, as it can affect your reputation and carrier.
- Borrowing from Friends and Relatives Being informed about your emergency such as a car accident or a serious disease diagnosed recently, the people you know will lend you small amount of money for sure. They would not demand any interest, or just the reasonable interest rate, but you risk spoiling your relations with your closed ones in case of the payback delay.
- Retirement accounts Once a year every citizen of the USA is empowered to withdraw the funds from the personal IRA or 401 (k) savings. The money is to be paid back within 2 months. Otherwise, the income tax on the cash is imposed and 10% of penalties are paid additionally.
- Life Assurance Loans The funds are commonly designed for covering the funeral arrangements. However, multiple assurance policies come with the possibility to withdraw some cash. You have the entire life to pay the money back, and no interest is imposed. If you fail to pay the loan back, it will be just subtracted from your death benefit.
Thus, multiple alternatives for payday loans exist nowadays. For example, you can get a loan from a credit union or a bank, use an online credit option or apply for a student grant loan. Using credit counseling services, you avoid various debt issues. Some of these loan or advance opportunities impose no interest, are easy to get and unconditional. However, payday loans are still very popular in America. According to Finder, 12 million of the USA residents take them out every year. So, think twice, consider all available options, ask a reliable professional for an advice if necessary and take an informed decision.