Unexpected expenses or increasing costs may leave some folks scrambling to get their hands on fast cash. Before you sign up for the often-suggested payday loan, consider a much better payday loan alternative: a personal loan. Taking out a personal loan from a credit union will leave you with more money in your wallet and far fewer fees to pay.
Personal loans can be used to pay for almost anything you need, such as covering emergency expenses, a big purchase, or debt consolidation. Personal loans are a very easy and quick way to get money when unexpected events come up. There is no collateral required for these loans and if you shop around, you can find great rates.
The Lure of Payday Loans
Payday lenders try to appeal to consumers who need a little bit of cash in a hurry. The promise of an approved loan regardless of credit history is often enough to compel a person to apply, and the simplified application process that primarily involves handing over a pre-dated check can make it all seem like easy money.
However, payday loans are not as simple as they seem. Many people that get involved with payday loans can get in the cycle of using them and it is extremely hard to get out of that cycle. People who already find it difficult to make ends meet may find that they are forced to take out one payday loan right after another to stay afloat.
Personal Loan Advantages
There are many advantages to choosing a personal loan over a payday loan, including:
While payday loans have high fees and interest rates, a personal loan can include little to no fees and much lower interest rates.
Payday loans are due in full quickly, whereas personal loans are paid back over a period of time, making budgeting easier.
The Federal Trade Commission recommends consumers try to find alternatives to payday loans to avoid those exorbitant fees while also staying away from the pattern of getting one payday loan right after another. They also recommend this course of action based on the increasing amount of fraud that occurs within the multitude of payday lenders that are currently available to consumers.
Personal loans can get you the money you need quickly for surprise expenses without charging you an outrageous interest rate. Consider taking out a personal loan as a much better payday loan alternative.
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