3 Alternatives to Payday Loans
Payday loans have always proven to be the best financial aid during emergency. As long as you have a pay check, these loans always come in handy.
However, the payday loans are not available to everyone. If you’re not a salaried employee, you cannot qualify for a payday loan. Or, if you have a poor credit score, it might be a nightmare to get a lender that gives you payday loan.
So, what are your other options in this case? Here are three reliable alternatives to payday loan that you can try out.
1. Bad Credit Loan
One of the alternative options for a payday loan you can go for is the bad credit loan. A bad credit loan can offer you a minimum of $500 and a maximum of $10,000 when in dire need.
You can inquire from your online lending company if they give this kind of loan and there terms. Also, check the amount you’re eligible for from different lenders to get the best offer.
Other things that come with bad credit loan that you should check before making an application is the origination fees.
Some lenders can also go through your credit history before processing the loan. But you’ll not have to produce collateral like with other kinds of loans.
2. Payday Alternative Loan (PAL)
If you’re a member of any credit union that is registered by the National Credit Union Administration, then you can get a cheaper loan from them. PAL will enable you to offset an existing loan or avoid taking a payday loan.
When you opt for a PAL, you’ll have between one to six months to clear it off, which is more relieving than the one-time payment option by payday.
A personal installment loan also allows you to service three different loans as long as you’ll not default paying. You can borrow a minimum of $200 and a maximum of $1000 with lower interest rates.
But, remember, you’ll have to pay an application fee not exceeding $20. In most cases, the rates of PAL are almost similar to that of credit cards.
3. Loan From Friends or Relatives
You don’t have to go to the bank every time you’re in a financial crisis. Sometimes the best loan options at your disposal are friends and family.
Approach them and request a loan to clear up your mess. Such a loan will protect you from the high interest rates that come with options such as payday loans. If you’re lucky, your friends can also give you a loan with no interest rates or fixed payment schedule.
Have a written agreement to have an easy time, especially if you want to pay in installments. Write the agreed interest rate, the amount of money borrowed, and the payment period or dates.
However, you need to be careful with this kind of loan as failure to repay it can affect your friendship. It can also result in a court case that can taint your name.