Thursday, October 31, 2013
Payday Loans - The Possibilities
Payday loan goes with other names including deferred-deposit check loan, quick cash loan, check advance loan, post-dated check loan, etc. But regardless of the name, its principle does not change: to provide emergency cash to people who need it now. Payday loan is a short term loan that caters mostly to people in need of emergency money before their next paycheck. Short term, meaning, the borrower has to return the money back to the creditors within few weeks. Short term also means that the money borrowed has higher interest rates compared to other types of loan vehicles.While high interest rate may be bad news for most, payday loan possesses a number of notable edges over the other types of loan vehicles. For one, borrowers can get loan approval within minutes. Also, the borrower's credit history is not checked by the payday loan lender. The borrower will not have to risk assets like the house or the car in mortgage since the lien for the money borrowed is the next paycheck. And, the borrower can borrow the money he or she only needs.The "dummy requirements" to apply for payday loan are simple. You just have to be at least 18 years old, you have a steady job for at least 3 months (some only require a job alone), and you should have an active and current bank account. In other words, virtually anyone with a job can apply for payday loan.It must be very tempting to someone like you who needs the money badly to take payday loans, but the question is: Is it the only way?The answer is, "no".There are several other possibilities of getting emergency money other than applying for payday loan. Most of the time, it is wise to look into these alternatives first than making payday loan the first and only solution.o Payment plan with creditors. You cannot borrow your way out of debt so if the reason why people apply for payday loan is to pay another debt, then you it is not bad to back off for a moment. Instead of borrowing money to pay your debt, negotiate with your creditors for a more manageable payment plan. Many creditors allow partial payment or extension which will free you from borrowing money from payday loan. Other creditors allow you to have more time to pay for your bills but don't forget to ask if they charge additional fee for such extension.o Emergency assistance program. Many religious institutions and non-government organizations have emergency assistance program which can lend its members money at small rate. Some emergency assistance programs offer 0% interest too. Each state has numbers of institutions willing to provide you financial assistance for whatever purpose it may serve provided that one member of your household meets certain eligibility criteria.o Employee's cash advance. The main requirement to be able to apply for payday loan is: the borrower should be employed. But if you can ask for cash advance from your employers, why do you need to apply for payday loan? Many employers allow cash advances to their employees. This is not a loan but a cash advance. Meaning, you don't have to pay any interest from advancing your salary.o Credit union loan. Many credit unions grant short-term, small loan to their members. They offer a much lower interest rate compared to payday loan companies. Many credit unions offer services including saving plan and free financial counseling so that their members are able to recover from any financial problem they have. Credit unions offer quick approval to members who need the money immediately. And unlike payday loans, credit union loans are oftentimes offered in long-term payment method so that their members can repay their debts in small amount and longer payback periods.o Credit card cash advance. Different credit card companies apply different APRs. Most of the time, it is cheaper to use your credit card than applying for payday loans. Take note that you may not qualify for a credit card cash advance so find other options such as secured credit card or credit card companies that specialized on bad credit records.If there is really a need to apply for payday loan, make sure that you only borrow the amount you need that you can afford to pay on your next payday. This loan carries a high interest rate so you have to make sure that you keep your future debt as low as possible.