Effective options other than payday loans for your financial problems

15 December 2014

When you are stuck in the middle of a monetary crisis, you look around desperately for a quick way out.

Payday loans might seem a tempting option in this situation because these loans are very easy and fast to get and can be availed even if your credit history is not impressive.

However, these short-term easy loans are laden with high interest rates. If you do not repay them on time, you will be weighed down with additional heavy interest and high penalty fees.

Once you are stuck in the loop by opting for a rollover loan, it will be difficult for you to come out of it for a long time, which will harm your credit score further. Consequently, you will end up paying a lot more than what you had actually borrowed from the lender.

It will be beneficial for you if you look around for other alternatives, some of which are discussed below.

Credit Unions are good option to avail loans

You can approach a Credit Union if you need a loan. The interest rates on the offered short-term loans are very nominal here. If you are residing in the vicinity and are working, you are eligible to apply for a loan.

However, you must join a Credit Union first to avail this facility of financial help. Not all but some of these unions only give loans to people who have some savings with them.

Request an advance from your employer

Maintaining a good rapport with your employer plays a critical role. Your good relation will help you in your time of need. You can approach him for a financial aid in the form of an advance on your pay.

Compared to a payday loan, it will not have any interest and fee to be paid on the loan. If he is generous enough, he will even spread the sum of the loan over a period of a few months to be repaid in small amounts, so that your take-home pay is not affected much.

Look around for goods not required at home

Generally, there is much stuff lying around at home, which is not of any use to you but you never notice them. When you face a cash crisis, better look around for such items.

You can easily sell them out on online portals and raise money that will be of help in tackling the situation to some extent if not completely.

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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk