Payday loans are popular around those who require instant money. They provide cash fast, direct to your bank account. Their assessment criteria are not as stringent as a high street bank, or traditional lenders would be.
With 5.4 million payday loans taking out in 2018, it is easy to see why they are becoming a popular choice for UK households.
However, the main reason why they are considered so disastrous in peoples financial status is because of the exorbitant high rate of interest that is applied to it.
If you have thought whether to take out a payday loan, why not consider other credit alternatives instead?
Sell your belongings first that you don’t need
Okay, nobody wants to sell their prized belongings, but do you need them? Plus, if you are such financial hardship, maybe you should consider selling them? Better this than taking out a payday loan?
You wouldn’t even realise this, but selling something you don’t need not only helps you out with the money required, yet it also clears out the junk that you don’t need in your home. So, it is a win-win situation all the time.
If you want fast cash, why not consider taking up a side job an option. It doesn’t inevitably have to be a job that is very demanding as your primary job. More a type of work that pays you money for investment of your other hours through the day.
Opt for a personal loan from a traditional lender
When it comes to the first alternative, get a personal loan sanctioned out from either the bank or from any other reputable lender. Using a reliable provider ensures that you have to repay no exorbitant amount of interests on the amount.
These kinds of personal loans are more comfortable to repay and don’t loom over your credit report as severely as a high-interest loan.
Use credit cards
Yet another alternative to the payday loans could be making a wiser choice on your credit cards. Even though credit cards themselves have interest attached to them as well, they can provide other beneficial impacts without the dealy interest rates of payday loans. But this will only work if you are smart with them.
The rate of interest applied to credit cards are more manageable, so that isn’t something that you need to fret. The only consideration that you need to ensure is the fact that you pay off the minimum monthly payment. Or, if you have an interest-free period, to repay in full by the period’s conclusion.
Do your homework
If you must take on a payday loan, make sure you consider all the alternatives. A couple of years back there were a plethora of payday loan providers including Wonga, Peachy, QuickQuid and Pounds to Pocket.
Now out of those big lenders, only Peachy remains. Even still, ensure that you check out all the Peachy alternatives, so you are fully knowledgeable on if there is a better option out there for you.
When you are trying to make ends meet, payday loans might seem like a good option, but they aren’t one in the long run. It is thus best that you stick to the alternatives mentioned to prevent getting yourself in a pickle.
About the author
David Bailey-Lauring is a single father of three boys and a content writer and regularly writes about personal finance, business, education and tech in the UK, USA, and Europe.