Available Alternatives to Payday Loans

When you’re in need of some quick cash for emergencies ore immediate expenses, you have a few options potentially at your disposal. These options include payday loans, title loans and various kinds of personal loans, all of which offer this kind of fast cash for various requirements in return.

At Utah Money Center, we’re proud to offer affordable car title loans and signature loans if you’re in need of these kinds of funds. We don’t offer payday loans – why is this, and why are our options generally preferable alternatives? Here are some basics on payday loans plus some of the other options at your disposal so you don’t have to give up quite so much financial equity.

How Payday Loans Work

Available in 36 of the 50 states in the US, payday loans are those based on borrowers writing a postdated personal check for the amount set to be borrowed, plus a finance fee to the lender. When the loan period, usually two weeks, is up, the borrower either pays the lender the loan amount plus the finance fee or allows them to deposit the post-dated check. If borrowers want to extend the loan, they can write another post-dated check plus another finance fee. Additional fees come for not paying the debt in full.

Payday loans, unfortunately, have very high interest rates that can make them tough to pay on time. They’re usually set at an APR of around 400 percent, which is much higher than title or signature loans in most comparable situations. The fees involved in them can also become exorbitant quickly, putting borrowers in a bad position.

Alternatives

You have a couple specific alternatives if you need similar quick cash options:

• Car title loans: Offered in about half the states in the country, title loans involve getting a value for your vehicle, then giving the lender your title as collateral for a loan you’ll be receiving. Title loans are offered in larger amounts than payday loans, but just like payday loans do not generally affect your credit score. Their APR rates are lower than payday loans, and borrowers generally have more success repaying them due to less stringent requirements and fees.
• Signature loans: Also called an unsecured loan, signature loans mean you have no piece of your own property tied to them as collateral. As the name suggests, all that’s needed is your signature. Depending on your credit history and income, you can get a signature loan for up to $50,000 in some cases – though most of them are for smaller amounts between $500 and $1,000. They’re often used for helping consolidate debts, with fixed interest rates that make it easy to plan for the future.

For more on your alternatives to payday loans, or to learn about any of our signature or title loan options, speak to the staff at Utah Money Center today.