Alternatives to an Instant Payday Loan

You've probably seen companies advertising their instant payday loan services. A payday loan is one that you get when you need quick cash, then pay back when you get your next paycheck. There is no credit check required to obtain one of these loans, so they are sometimes the only choice for people with bad credit. However, these loans can be very expensive. The best course of action when obtaining one of these loans is to borrow the smallest amount possible and pay it back quickly to avoid expensive fees. But what if you need a larger amount of money and can't pay it back quickly?

If this is the case, you'd be wise to investigate other options. Why? Because over the course of one year, you could end up paying an APR (annual percentage rate) of more than 500 percent! That means if you took out a $1,000 loan and it took you a year to repay it, you'd end up paying $5,000! Many people end up in real financial trouble because of these supposedly convenient loans. If you're thinking about getting one, you should review other alternatives first.

One alternative is to go to your bank, credit union, or other lender in your area. If you have reasonably good credit, and sometimes collateral, you can often get the money you need at a decent percentage rate. But what if you're denied a loan from one of these financial institutions because you have bad credit or don't have any collateral? In this case, you could try asking for a personal loan from friends or family members. Another course of action is to look for things that you could sell. Antiques and jewelry are good choices that can help you get the cash you need. You could take your items to a pawn shop, advertise the items in your newspaper classifieds, or sell them somewhere like Ebay.

Selling possessions may seem like a drastic measure, but sometimes this is the only way to get yourself out of a financial hole. If you do decide to go with an instant payday loan, make absolutely sure you understand all of the companies policies and fees you will be charged. And, as mentioned earlier, try to pay off the loan as quickly as you possibly can, to save yourself outrageous fees and charges.

Copyright 2006 Jim Sterling - All Rights Reserved

 

 

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