There may come a time in your life when you’re in need of quick cash to pay bills or need funds for an emergency circumstance. While it’s easy to say that a savings account is ideal in these situations, a lot of people don’t have enough money in their bank to cover the full cost of their needs. Payday loans have been a go-to for many in the past several decades because they’re designed specifically for people with bad credit who need money within a day or two. Unfortunately, payday loans have notoriously high interest rates and fees, and you’ll be responsible for paying back the entire borrowed amount by your next payday period. This is what has prompted some individuals to look for a good payday loan alternative to make their lives easier while still obtaining the cash they so desperately need.
An installment loan is practically identical to a payday loan but without the need to pay back the full borrowed amount by your next pay period. Instead, you’ll need to pay back what you borrowed in easy and affordable installment plans over the span of several months. You don’t need to have a good credit score to be approved and you’ll receive your funds within a matter of one or two business days. As long as you have a way to continually make your installment payments, you’ll have no problem with this payday loan alternative.
Banks loans are more secure than all other types of loans and you’ll be locked into a rate that is lower than what you’d find with a typical payday loan or credit card, but they’re often specifically meant for people with good credit. If you have bad credit, you’ll likely be denied the bank loan or receive a ridiculously high interest rate. Also, it could take weeks to be approved for a loan, unlike a payday loan that takes just a day or two.
Credit cards may have high interest rates, but they’re great in emergency situations when you need to pay bills or make purchases that you just don’t have the money for. The key to using your credit card wisely is knowing your borrow limit and the interest rate you’ve been locked into. Some credit cards offer new customer bonuses that allow you to pay little to no interest within your first year.
With any of these alternatives, you need to do your homework and understand all of the disadvantages and advantages of obtaining money using these methods. The best way to avoid debt and financial problems is to prevent yourself from getting locked into a high interest loan or card that is difficult to pay off.