A payday loan is a quick and easy solution for people who are desperately in need of cash. I.e. when a member of your family suddenly has medical problems and you would need to buy medicines immediately. The loan you get from payday loans will be fast because it cut shorts through a whole lot of paper work and red tape. Once you have applied the money you need is deposited into your bank account within 24 hours.
The disadvantage for people who will acquire payday loans is that if they extend the loan or “roll over”, a relatively high interest rate fee is paid. A person will borrow $100 from a payday loan company. He will then issue a postdated check for 14 days worth $115.
The annual percentage rate of the loan is 391%. If the person rolls overt the loan 3 times, he or she would need to be paying $60 worth of interest. Almost half of what he or she originally borrowed. If you think you have no capabilities to pay the loan on time, here are some alternatives to payday loan.
- Shop carefully for credit cards; compare each and every credit card offer you are able to get. There are now credit cards that are for people with bad credit history. Look for a card that has low APR. You could also negotiate with your current credit card company to lower the APR.
- It may be hard to do but if in dire need of cash one should try borrowing money from family, friends or advance pay from the employer. There are also companies that might offer small loans. There might also be an organization in your community that provides business loans.
- If you have a credit card you can get cash advances from it too. Try to avoid it though, because cash advances on cards have high interest rates as well.
- Ask a favor from your creditors if they could extend the time for you to pay your bills. Ask them what the additional charges to be met are or probably a higher interest rate.
- Try to save money by making realistic budgets. Try to figure out your monthly and daily expenditures. Avoid making unnecessary purchases because they will deplete your budget.
- Try to save some money even a little bit periodically. This will help you prevent borrowing money from other people or getting a payday loan.
- Ask help from Consumer Counseling Services on how you can budget or develop a debt repayment plan.
- If you still decide to get a payday loan, borrow only the amount you are capable to pay.