You are not alone if you have unexpected costs and struggle to find the money to make you until your next payday. Around 40% of Americans are having difficulty affording even a $400 emergency cost. If this sounds all too familiar, you are at the right place.
If you are looking for a quick fix to cover unforeseen costs and carry you to your next payday, payday loans might be just what you need. These are small-dollar loans that you repay after you earn your next paycheck, usually within a month or less. However, in Pennsylvania, these loans are not allowed at the state level; thus, picking one of the best alternatives may be worth examining.
What are Alternatives to Payday Loans?
Taking out a short-term loan may not be a good option if you cannot pay it back in full on your next paycheck. You would be better considering alternative options than making your payment past due. Here are the best options to choose to opt-in.
If you are in a pinch, passing up traditional credit tools, such as personal loans, may not seem a good option. However, pick up a personal loan either from a bank, credit union, or online lender and have a much cheaper alternative to a payday loan. Most personal loans, similar to payday loans, don't require any collateral. However, beware that having backed security behind may provide you better credit terms.
Borrow from Your 401(k)
An option for a loan from a retirement account is a money withdrawal from your savings for instant use. Most retirement plans, such as 401(k) or 403 (b), allow taking about at least fifty percent of your balance and pay it back with interest. At first glance, it seems a handy alternative to a payday loan as you borrow from yourself and pay less in interest. However, taking out a retirement plan loan may be beneficially dangerous. You are not likely to hurt your credit as you borrow your own money. However, you may reduce your monetary contribution to your savings account if you choose to pay off your debt through payroll deductions. Plus, in case of loan default, you can endanger your future financial wellbeing.
Bad Credit Loans
Some internet lenders cater their services to those with poor or no credit. Loan applicants with high debt-to-income ratios and poor to fair credit ratings can easily qualify for these loans. First, to see what lenders can offer you, pre-qualify for bad credit loans to compare multiple loan offers without affecting your credit score. Many online lenders include quick financing as part of their service and will transfer funds into your bank account the same or the next working day after you've been accepted.
Get help with Medical Bills!
You have a few choices before going to a payday lender to pay your medical costs. First, check with your doctor's office to see if you can set up a payment plan that divides a large debt into smaller monthly installments. Advocates for medical bills negotiate lower costs following a costly operation or hospital stay. They can also identify and challenge expensive mistakes. Some medical credit cards feature interest-free promotional periods that may assist you in covering the cost. In addition, credit card companies may request a credit check.
As a result of changes CFPB has made, from July 2020 the lenders don't have to check if the borrower is able to repay the loan. Thus, we encourage you to be careful and make sure you can afford the loan before applying.
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Real interest rate map /PDF/ of payday loans in the United States calculated on a typical loan.
Payday loans regulation /PDF/ by state 2020.
|In the state of Pennsylvania, payday lending is considered illegal according to the Check Cashing Licensing Act of 1998, 505(a).|
|Pennsylvania’s Loan Interest and Protection Law (LIPL) prohibits lenders without the CDCA license to charge an interest rate in excess of 6% per annum on a loan amount less than $50,000.|
[ Updated on 29-Aug-2021, 20:16 ]