Consider these tips before getting a payday loan.
Check at your local credit union or bank to see if you qualify for a personal loan. You never know until you ask. If the amount you owe is greater than $40,000 and you have a property, you might be able to clean up your financial situation with a home equity loan.
Often payday loan is a debt trap. Between 50 to 75% of the loans are repeat loans. Fees quickly add up. In a study in the states 41% of borrowers needed a cash infusion to pay off a payday loan. So borrow from your friends or family first, because you’ll end up borrowing from them anyways. If you do it first you will actually need less and save a lot money.
Cut down your expenses and sell some of your stuff before you get a payday loan.
Remember payday loan rates are five to six hundred per cent annually speaking. NEVER use a payday loan to pay off your credit card. If you can’t pay the credit card rate of 29%, you’ll never be able to pay off a 600% payday loan.
If you have to borrow a payday loan, ask yourself where you will be getting the extra money to pay this loan and the fees in a week or two. If you cannot answer this question, then you are going to be in a hamster wheel of debt. You’ll just end up owing more and more as fees pile up.
As a pre-emptive measure, build credit early. Often young people cannot borrow any money from traditional lending institutions because they do not have a credit history. Apply for a couple credit cards, use them responsibility and pay them off each month. Records of phone bill payments are useful, but not as good as credit card usage history.
Good luck and may you never need to consider a payday loan.
At Alternative Lending.Ca, we are specialists in non-bank lending. This means we are experts in home equity loans, second mortgages and mortgages from mortgage finance companies, credit unions, trusts and other lending institutions. Call John at 604-831-4437 to get the process started. Consultation is always free and confidential.