Although payday loans may seem attractive to those going through financial hardship we must not forget that they are extremely bad in the long term. The way in which they work almost creates a vicious repetitive cycle. In the following article we will go over five alternatives that we have to a payday loan.
Family and friends
Whilst this is a very common, and often the very first, option that people choose, this is also one that we must be wary of. A family member or a friend might offer their financial help but we must always bear in mind that this may have an effect on the relationship with them, and possibly even with other family members. When borrowing money from a friend or family member it must always be stated that the money will be paid back as soon as possible, and maybe even concider putting the agrement in writing, in order to avoid any possible conflict with them in the future.
If you find yourself living in a country where you are applicable to get help from the government then this could be a very valid alternative to getting a payday loan. With government loans and interventions you might be able to avoid that high interest rate payday loan. Even more if you live in a country where the government would help you to study and get a better paying job, which could stop the need for getting out another payday loan later in life. Read more!
Whilst this is also not ideal, the interest rates paid on credit cards are normally less than those of payday loans. With this method of payment it is possible to pay back as much or as little as possible at certain times. However, when doing this it is vital that you pay back as much as you can do every month, in order to try and keep the interest that you pay down.
With this alternative to a payday loan, as with the others, we must remember only to do it if we are in dire need of the loan.
Savings vs payday loans
This is an alternative to payday loans that not all may have. For those savy and lucky enough to have savings then this is one of the best options that we have instead of taking out a payday loan. Here we don’t have to worry so much about interest rates and paying the money back. Maybe it means that we will have to wait a little longer for that thing that we were saving for but it is better than slipping into a financial landside by taking out a payday loan.
Whilst this is also a way of being lent money from a bank, credit union or online lender the huge difference here is that a personal loan can be paid back over time and in manageable installments. Whilst the money cannot be access as fast as a payday loan online would be, it is a much more valid way of borrowing money. This means that that small loan you took out won’t lead to you going broke. Here is a much easier and stressless way to borrow money when in times of need.
So whilst there are few alternatives when we are looking at payday loans, we must take them all into consideration before making our final decision. When in moments of financial need we may be oblivious to reason and just need the money and fast. But we must stop and think, with the interest rates being so steep on the payday loans we should always try and find other options before resorting to them. For more information visit: https://www.wikihow.com/Avoid-Payday-Loan-Fees