A Better Alternative to Payday Loans
We would all love to have a nice, robust savings account that could help us make it through just about any emergency, but the reality for most people is that we are working to make it from one paycheck to the next and surprise expenses can be a real drain on our finances. Unfortunately when those surprises expenses do come most people are unaware of option to get cash quickly and turn to one of the most expensive options available: the payday loan.
The High Cost of Payday Loans
A small, short-term loan is exactly what you need to get through an emergency, but payday loan costs can really add up over time. The process involves writing a post-dated check, or signing an agreement to have an amount withdrawn from your bank account after you get your next paycheck before you walk away with cash in hand.
The problem is these loans often come with high fees, and you may find that when the next pay period rolls around you don’t have enough cash to cover your previous debt plus future expenses, and have to roll over the loan (for an additional fee), or take out another loan. In fact, the average borrower takes out eight payday loans every year, which is about one every six weeks, with average interest costs over $500 annually.
A Better Alternative
The best alternative to a payday loan is a more traditional installment loan that comes with fixed monthly payments, and an interest rate much lower than payday loan fees. These loans provide a clear outline of exactly what you will be paying, and how long it will take to pay off the debt.
While you can go to a bank or credit union for a personal loan, the process can take several days, or even weeks, which doesn’t work if you need cash quickly. You may also need to put up some type of collateral to get an affordable interest rate on that kind of loan.
Signature loans are another option for people who need cash today but cannot get it through a traditional bank, and don’t want to get a payday loan. These short-term loans offer several benefits, including:
- A quick application and approval process
- Cash available in as little as 15 minutes
- No checking account required to qualify
- Lower interest rates and fees than payday loans
- Only your signature is needed—no proof of assets
These loans are ideal when you need to cover short-term emergency expenses or avoid excessive overdraft fees from the bank. Most loans will require proof that you are currently employed, that you reside in the state where you get the loan, and that you have a valid ID and social security number. After that all it takes is a few minutes to approve the loan and get the cash you need.
Don’t fall victim to the debt trap of payday loans—find out how a signature loan could help you get back on your feet after a financial emergency today.