Risk of Payday Loans
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The most obvious disadvantage of a payday loan is the high cost. The APR of a payday loan varies between 400% to 800%. Think about your investments even on a high interest stock, you can get an annual return of 20% to 30% for an investment on a stock although investments on stocks are considered as “high risk”. So, consider all the possible alternatives before opting for a payday loan cash advance.
Payday loan borrowing situations arise due to bad financial planning. I suggest that you prepare a realistic budget at the beginning of each month in order to keep a balance between your earnings and spending. Avoid unnecessary purchases. Also save some money each and every month. Your savings will really count at a time of crisis. Consider asking for help from a consumer credit counseling bureau.
Ask your creditors to do you a favor by waiting until your next payday. If you can convince them to do so, you need not apply for the loan and you can save $15-30.00 by not paying the loan interest!
Use your credit card for making urgent payments. Usually credit card interest rates are relatively low; you can even pay no interest if you repay the loan within a month. Again, you save $15-$30 by not paying the loan interest.
Ask your banker or a credit union for a short-term loan. The costs of these loans are much more easily affordable.
Ask your employer to provide you with a portion of your salary as advance so that you can take care of your emergency bills.
Consider borrowing money from your friends or relatives. Actually for a time lag of 1-2 weeks nobody will prefer not to provide you the money (I strongly believe so!) unless you had a bad credit history with him or her. Thus you will meet your money requirements with no interest charges at all! Also think about the harassments if you can’t be able to repay the loan at specific date to the payday lender!!
Consider in making arrangements with your banker regarding withdrawal facility from your checking A/c in order to protect yourself from making extra charges on bounced checks. This facility costs you as little as $5.Sometimes no fee is needed at all!
When you shop for credit, check the APR and other official charges of different credit offers. Thus you can avoid higher monthly charges with lower credit cost.
Many social groups and communities provide urgent assistance either directly or by various social services programmes. For example, I can mention “Federal low income home emergency assistance programme” provides financial assistance to families with lower income.
There are several loan companies who offer $500 to $100 loan to active in duty & retired military personnel. The APR of these military loans range from 34% to 40% which is 10 to 15 times cheaper than payday loan.
There are also several Consumer finance companies that provide small consumer loans at a low APR of 60%, which is also cheaper than payday loans.
Do the homework when you are about to borrow a payday loan. Look for low interest payday loan. Gather all the knowledge about payday loan before borrowing it.
How Much Does A Payday Loan Cost?
What are cash advance or payday loans used for? This is a good question. Single moms and single women can find a hundred uses for a cash advance loan! Sometimes it's enough to keep the lights on. Or it can be used to buy that cosmetic kit to start your own business, or it can be used for em. . .