If you regularly spend more than you earn, that is a bad habit. If you decide to get a payday loan to get out of this situation, you will be taking a "risky route." Most of the time, payday loan companies take advantage of your need and trap you in a cycle of debt.
The most obvious problem with payday loans is that they cost a lot of money. The APR for a payday loan can be anywhere from 400% to 800%. Even if you invest in a "high risk" stock with a high interest rate, you can get a return of 20% to 30% per year.
Before getting a payday loan cash advance, think about all the other ways you could get the money you need.
- People need payday loans because they didn't plan their money well. I think you should make a realistic budget at the start of each month so you can keep a good balance between what you earn and what you spend. Don't buy things you don't need. Save some money each month as well. In times of trouble, your savings will be put to use. Think about getting help from a place that helps people with their credit.
Ask your creditors to do you a favour and hold off on charging you until your next paycheck. If you can get them to do this, you won't need to borrow the money, and you can save between $15 and $30 by not paying the interest on the loan.
Use your credit card to pay for things quickly. Most of the time, the interest rate on a credit card loan is very low. If you pay back the loan in full within a month, you don't even have to pay interest. Again, if you don't pay the loan interest, you save $15 to $30.
- To get a short-term loan, talk to your banker or a credit union. The costs of these loans are low enough that you should be able to pay them back.
Ask your boss to give you a portion of your pay in advance so that you can pay for unexpected bills.
- Think about asking your friends or family for money. I'm pretty sure that no one would rather not give you the money for a delay of 1-2 weeks unless you had a bad credit history with that person. So, you'll have the money you need without having to pay any interest. Think about how the payday lender will treat you if you can't pay back the loan by a certain date.
- Talk to your banker about how you can withdraw money from your checking account. This will help you avoid having to pay extra fees for checks that don't clear. You can use this service for as little as $5. Sometimes there's no charge at all!
Check the APR and other official fees of each credit offer when you are shopping for credit. With a lower credit cost, you can avoid having to pay more each month.
- A lot of social groups and communities help people in need directly or through different social service programmes. For instance, I could say that the "Federal low income home emergency assistance programme" helps low-income families with money.
There are a number of loan companies that give active duty and retired military people loans of $500 to $100. The annual percentage rate (APR) for these military loans is between 34% and 40%, which is 10–15 times cheaper than a payday loan.
There are also several consumer finance companies that offer small consumer loans with a low APR of 60%, which is also cheaper than payday loans.
Do your research before taking out a payday loan. Look for loans with low interest rates. Learn as much as you can about payday loans before you take one out. Visit A HREF="http://www.ampmcash.com/personalfinance-articles/" target= blank">Personal-Finance Articles/A> for more in-depth discussions on alternatives to payday loans.
