Money Management

Don’t Make Payday Loans a Scapegoat

Payday loans are the fastest way to get cash before your payday and the best way to get financially ruined in no time. People often forget that any money borrowed from a payday lender will generate high interest rates that summed up to an already existent debt, make payday loans a heavy load to pay off.

If you are already trapped in a debt circle resulting from credit cards, mortgages or another type of loans, you do not really need to add a payday loan to this circle, but find suitable alternatives for your imminent money need. There are at least four alternatives to a payday loan that might be the answer to you are looking for, so simply analyze them and decide yourself which is the best in your particular case.

Negotiating

The most viable way is talking to your creditors and asks the possibility to extend your due date. Okay, you need money, not refinancing or similar thing, but this way you can take the money that you reserve to repay your debt, assuming that you have this money available in a savings account or somewhere at home. There are two possibilities here; on the one hand that you really need the payday loan to repay other debt. In this case, a creditor can extend the due date without reporting to the bureau or charging a penalty for late payments, thus removing the need to get cash advance. On the other hand, you might have never thought to put aside any money to repay your debt, living on a paycheck to paycheck basis.

Credit Cards

However there is a second alternative here, as long as you need the money to buy something or that your credit card grants you access to cash advance. Yes, using your credit card to pay for items is cheaper that borrowing money from a payday loan. However getting a cash advance from a credit card (when allowed) is costly than paying for goods at the time of purchase, although both of these solutions into one financial instrumental will always be cheaper than a payday loan, and some banks give a few days grace period to repay cash advances before interest rates apply.

Family or Friends

The third alternative to payday loans is not always suitable and not always impossible; which is to borrow money from a family member, friend or even your neighbor. Perhaps this last thing will only give you nothing more than a few bucks, but sometimes a few bucks can make a difference. However family members or friends may have your money solutions in their hands and it is about daring to ask them. The main advantage is that they may lend with no interest rates, but there is a risk factor involved here. Money is often responsible for broken relationships, so if you are unsure of your financial capability to repay their money in a timely manner, you will do better select another alternative. Be honest about your financial situation when talking to them and never promise without having the certainty on what you are saying.

Reevaluate Expenses

Perhaps the fourth alternative is the best of all of these; cut down on your bills. Depending on how much money you need, you can cut out some services that you do not need, or you can delay the payment without being reported to bureau if your delay does not exceed past 30 days. If you cannot live without paying your carrier the extra module that enables you to text your friends beyond the limit of you cell phone plan, for instance, then try to cut out the amount of beers that you drink. Tighten your belt for a month or two will not hurt and can give you the extra cash that you need, or can be an “extra” income if you keep reducing expenses consistently.

There are several other alternatives to payday loans, but these are some of the easiest solutions that you can find.

Author Bio: Noel Finlay works for FastCash.org a company that provides information on quick loans. 

Comments (1)

  • I see why so many people use payday loans but they are not a good way to save money. What I recommend is that you live off a credit card for a week if you really need some money.

    Pam

    Reply

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