Payday loans can be a very convenient loan to take out, especially if you are without funds and need to make a quick payment on something that absolutely needs your monetary attention. Like every type of loan, however, there are things to be on the lookout for and redflags and warnings of which you should be familiar. There are a number of things to consider before you take out a payday loan. Hopefully, this brief article can help you out with those considerations. There might even be options that are immediately (or, in the long run), much better for you. Included throughout are four things to consider before taking out a payday loan.
Loan From A Family Member
Before deciding on taking out a payday loan, it might be in your best interest to take out a loan from a family member in writing. Chances are, if you're taking out a payday loan, then the issue is quite pressing and it needs to be addressed immediately. If you have a trusted family member that you can count on for a loan, you won't need to worry about the pesky interest involved with a payday loan and you won't have to take into consideration the level of trust and faith you will have to place in a lender. Make sure that the loan you are given is taken out in writing and notarized, so both you and the family member will be legally bound to the document.
If you owe money to any companies – and this is the reason that you are taking out the loan – speak to the companies directly before taking out a payday loan. There are often hefty interest fees involved with taking out a payday loan, and you can often times work with the companies in question in order to work out a sort of payment plan that doesn't involve you taking out a loan at all, but rather paying the company back in an adequate amount of time. This does not always work out, but it will never actively work against you, so it is always recommended that you try this option first before committing to a payday loan.
Taking a cash advance on a credit card is quite similar to receiving a payday loan. In fact, almost every credit card has a far better interest rate than anything that is available on a payday loan. The interest and APR involved in almost every credit card cash advance is something that is far preferable than dealing with a lender of which you are not well acquainted. Although taking out a cash advance is not always the most recommended thing to do to help your credit score, if it is something that is necessary, than it is highly recommended that you choose this phenomenon over the alternative.
Contact A Credit Union
Before going to a private lender for a payday loan, it is also recommended that you do a bit of research into what a credit union can do for you. Even if you have particularly bad credit, a credit union can usually help you out, as long as the loan of which you are applying for is particularly small (and, if you're looking into a payday loan, that amount cannot total over $500). The average interest rate for a credit card loan from a credit union is 11.55%, an interest rate that can't be beat. Take the time to speak with representatives from credit unions before choosing a private lender.
Hopefully, this brief article has given you a bit of insight into some alternatives from which you can choose besides that of taking out a payday loan.