Don’t take a payday loan unless you have exhausted all other options. Most people opt for a payday loan and end up paying up to 400% of the principal amount as some lenders charge unbelievably higher rates of interest. Before you apply for a loan, consider the following alternatives.
1. Family and friends Your family or friends may help meet your short-term financial needs. The biggest advantage of this type of loan is zero interest rate. 2. Installment loan Unlike a payday loan, an installment loan comes with a lower interest rate in addition to longer repayment terms giving you enough time to repay. 3. Credit card cash advance Credit card cash advances feature higher APRS but better fees and terms. Often, it’s a good idea to accept a higher interest rate and pay offer the amount over a long period of time. 4. Unwanted Items To make some extra cash quickly, you can share your car/house or you can sell stuff that you don’t need, such as an old mobile phone, laptop or furniture.
5. Negotiate If none of the options seems to work, just go ahead and let your creditors know that you are going through tough times and that you need more time to repay. They may extend the deadline for you. Bottom line When you are short on money, don’t opt for a payday loan before exhausting other alternatives that you may have. Just be on the safe side and make an informed decision.