ALTERNATIVES TO PAYDAY LOANS THAT CAN BE OF HELP DURING THE COVID-19 CRISIS
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A Payday Loan can be very expensive and even more expensive if you default or miss the payment date. You might have to pay more in interest and charges if you don’t pay back the loan on time. As a result of this, you might want to consider other alternatives especially if you are in a precarious financial situation so that you don’t heap more pressure on yourself. There are other less expensive options you can consider like borrowing from lending circles, and local charities.
It can be difficult to get financial help when things are fine and it can be even more difficult to get financial help in the form of loans during a time of pandemic like we have right now. COVID-19 has thrown the entire world economy into chaos, most people are struggling to get unemployment money and some people in certain states haven’t even received their relief checks.
If you are in a tight financial situation, a payday loan might look appealing to you but in the long run, you might just find out that it shouldn’t have been your preferred option in the first place. The risk is high and it can unbalance your finances and leave you worse than before you took out the loan.
We will consider nine alternatives that can be considered when you need to get a loan, these other alternatives are less expensive compared to payday loans.
Check charities and nonprofits:
This option is very good to cover important expenses. Local lenders like nonprofits and community centers can be of help when you need cash to pay for certain bills like gas, groceries, and other unexpected expenses that may arise in the course of your daily activities. Some of these bodies even offer more in the form of bus tickets for job interviews or medical appointments, food donation, And clothing, among others.
How fast you can get help from these bodies depend on what exactly you need and from which of the nonprofits or community centers you are applying with.
Seek to get help for medical bills
Instead of going for a payday loan to pay for your medical bills, you can check out other options that provide funding for this purpose. There are a whole lot of options you can try in this regard. Some of them include; medical bill advocates, asking your hospital for affordable payment plans, make use of a medical credit card.
How fast you get the cash depends on the option you choose to go for. Most of these options come with a fee, consider what the expenses will be, and compare with going for a payday loan or other options available.
This is an option most suitable for you if you have a good relationship with a credit union and you still have the time to wait for a few days to get approved for the loan. Being a member of a credit union or being eligible to be a member will boost your chances of getting the money you need via this option.
The credit union will not only focus on your credit score in evaluating your chances, but they will also take a look at your standing with them, your credit history, and your income to decide if you are qualified.
You can apply for a bad credit loan
Individuals who have a credit score below 690 are regarded as having bad credit. There are specialized lenders online who have designed their services to suit those who have bad credit. Most of these lenders do not carry out credit checks and can approve borrowers who have high debt-to-income ratios for a loan.
You can apply to pre-qualify for a bad credit loan if you are not sure of your chances. It will not hurt your credit in any way and the advantage is that you can pre-qualify with as many lenders as you can.
Most of these online lenders offer very fast funding, most time you get the loan the same day you apply. Title loans are one of the many online loans that you can apply for and get funded on almost the same day, here is how it works.
However, in response to the COVID-19 pandemic, some of these lenders have raised the requirements for applicants. You should also note that banks and online lenders will report prompt and missed payments to credit bureaus and this can have either a positive or negative impact on your credit score. Prompt payment will affect your credit score positively and vice versa.
Look for alternatives to raise your income
You can look at what you can do to make more money. This can be temporary or permanent. It can be a side hustle that will rake in more bucks for you or look for avenues to get extra cash that can ease things up for you.
You can turn your hobby into an online shop, sell some items you no longer need or consider driving for a rideshare company. All these can help you to make extra cash that will help in paying your bills.
Other methods you can consider include forming a lending circle with your friends or families, borrowing from a friend or family member, or using a paycheck advance app.