What are Alternatives to Payday Loans?
Payday loans are easy to set up, but can quickly turn into a problem debt. These loans don’t help or improve your credit report, but they can have a negative impact on your credit rating if you don’t pay them back on time and adhere to the unfavorable rates and terms of the loan. If you need to borrow money and are thinking of getting a payday loan, stop to consider other options you may have available.
People often find themselves seeking a payday loan for everyday essentials. A payday loan is almost certainly not the answer if you need the money to pay your household bills, rent, or mortgage payment, or to pay back people you may owe money to. If you find yourself struggling to pay for everyday essentials, please consider speaking with one of our certified credit counselors to seek professional advice about building a spending plan to prioritize your bills. This service is free to members of Call Federal and provides valuable financial advice delivered in a non-judgmental way. It will introduce you to self-discovery tools and provide you with steps to take control of your money and help it work for you.
Payday loan companies frequently encourage you to use their loans to treat yourself for a special occasion and often stress how quickly you can get your money. It’s true that in many instances, you can get money deposited directly into your account in fewer than two minutes. It’s true that bad credit or even no credit isn’t a problem. But take a look at the rate you are being offered on these types of loans. They can range from APRs in the mid-20s to over 100%. Yes, over one hundred percent! You may also be responsible for other fees attached to these types of loans.
If you have ever had an emergency and used payday loans in the past or know someone that has, it’s a great time to ask the question, “What will I do for the next emergency or if I’m faced with a financial crisis?” Planning now can save you hundreds, if not thousands, of dollars that could be applied to your other financial goals.
Less Risky Alternatives to Payday Loans
If you need money before payday:
- Ask your employer if they would be willing to give you an advance on your wages.
- Borrow from a friend or a family member. Of course, if you do, it’s wise to take the time to review and agree on a repayment schedule. Put your agreement in writing to assure your friend or family member that this is a loan and you aren’t asking for a gift, but will repay the amount you have borrowed.
- Work toward a spending plan that will help you save for the next financial emergency.
Easy money rarely is as easy as it seems. Make sure you know what other options are available to you before you take out a payday loans or any other financial agreement you take part in.
Need help with your next financial decision? Contact us today. Call Federal is always here for you when you need us.