7 Ways To Get Money Fast Besides Risky Payday Loans

With the end of COVID-19 restrictions, there are a whole bunch of people eager to do a whole bunch of things that have been denied them for over a year. Unfortunately, even with the new stimulus, tight budgets aren’t much of a rarity.

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Payday loans are enticing – quick cash without a credit check or digging through tax returns like with a personal loan. It sounds too good to be true.

It is because it is. About 12 million Americans take out these easily accessible unsecured personal loans each year, many of whom are struggling with monthly bills and personal expenses, according to Forbes. Many are unaware of the danger of insanely high triple-digit interest rates.

“Unlike other loans, payday loans must be repaid in full on the borrower’s next payday at annual interest rates of around 400%,†wrote Melissa Rayworth of TakePart. Rayworth also noted that up to 97% of people will borrow again on a payday loan.

Payday loan borrowers are vulnerable to a downward spiral of debt that can last for months or even years, dilapidated creditworthiness and predatory and aggressive collection practices on the part of debtors who want immediate repayment. “If you take out a payday loan, you’ll almost always end up with a financial loser,†wrote Trent Hamm of The Simple Dollar. “They almost always cause more problems than they solve.”

The good news is that there are better ways to get money fast.

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Avoid Payday Loans With These Quick Cash Alternatives

1. Take out an alternative payday loan.

Yes, these really do exist. Veridian Credit Union, based in Iowa, for example, offers a PAL with a maximum loan amount of $ 1,000 and a repayment term of six months at an interest rate of around $ 20, usually regardless of the borrower’s credit score. While not the lowest interest rate, it is easier to manage than the high interest rates and short repayment terms of a payday loan. Keep in mind that Veridian is a credit union that serves residents of certain counties in Iowa and Nebraska and a few other selected groups. If you’re not in their area of ​​membership, ask a community bank or credit union near you if they have a comparable product.

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2. Get a cash advance on your credit card.

Another similar, but less expensive, option is to contact your credit card operator for a modest cash advance. Again, the interest rates might not be the lowest, but this time you’re borrowing against your own credit limit, not a third-party payday provider. If the cash advance option seems too overwhelming, just use your credit card for your post-COVID celebration and avoid using it again until you’ve paid off your balance.

Learn more: How to bounce back from a month of heavy spending on your credit card

3. Withdraw from your emergency fund.

If the added interest of using your credit card is too much to manage, you can always try to take just enough money from your emergency fund to cover holiday shopping expenses. Since you are acting here as your own lender, this loan is entirely yours to repay, but financial discipline is important. Allow too much time to pass and you may never be able to replenish what you’ve borrowed. And that means you might not have enough cash in a real emergency.

4. Request an advance from your employer.

Your job may allow you a cash advance taken from your next paycheck. It’s not a loan, so you won’t have to worry about interest or repayment since it’s money you earned. However, keep in mind that if you are asking for $ 200, be prepared for your next paycheck to reflect that difference. It is also wise not to make a habit of asking for cash advances. Taking frequent financial shortcuts could leave a bad impression on your employer. Instead, ask for overtime – overtime can earn you extra money.

5. Sell, pledge, or auction unwanted property.

Now is the best time than ever to sell some of those old things that are taking up space in your home. It can be anything from a used cell phone to furniture, vintage clothes, appliances, etc., a rich source of quick cash. Go online, like eBay, Amazon Marketplace, or Craigslist, or Discover applications like OfferUp and Letgo.

6. Cut down on your expenses.

One of the good things to come out of COVID-19 is that many households have cut back on their spending. Some people have cut their budget out of necessity. Others lived on less due to lifestyle changes from work from home. When the skies clear and life returns to semi-normal, resist the urge to fall back into pre-pandemic patterns. Try to spend less on things like clothes, entertainment, and other disposable income purchases. If you put the difference aside, you won’t need a disaster payday loan. Some financial experts even suggest adjusting the tax withheld from your paycheck so that you have more money available now than later.

7. Save money with an app.

It is not a source of quick cash, per se, but the right application can go a long way to ensure that you are not desperate enough to consider a payday loan the next time an emergency strikes. your door. Acorns is the original roundup app – it rounds every purchase you make to the next dollar and invests the difference. Chime has some cool auto-save features and lets you get money out of your paycheck sooner. Proper application and a little discipline now could give you the financial cushion you need so you never have to worry about payday loans again.

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Andrew Lisa contributed to the writing of this article.

Last updated: September 6, 2021