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Thread: Any other alternatives to payday loan?

  1. #1

    Any other alternatives to payday loan?

    Hi All,

    We all know that payday loans are not healthy loans, so what are alternatives to it?

    We know people who take payday loan are basically under urgent financial need and are with poor credit standings. SO what are the alternatives to payday loan?

    Thanks,

  2. #2
    I disagree. I believe the majority of people who use payday loans do it time after time after time. They are not always in urgent financial need, but they tell themselves they are. Urgent need is like when the car breaks down and you can't get to work, not when you spent too much on cable movies or your cell phone and now you don't have money to go eat out. It is a lifestyle some people allow themselves to get into. Unfortunately it is a little like gambling; the house always wins.

    I used to have a guy working for me who was like that. He was always in hawk to the loan sharks. His theory was as long as he could afford the payments, he was alright. He was garnished on a regular basis, and he was always looking for an early paycheck, even though he earned pretty good money.

    People who are aware of the cost of doing business with these creeps take one look at the agreement and realize that ANYTHING would be better than borrowing here. Car title loans are even worse I think. You get sucked into the vortex of debt and are lost forever until you claim bankruptcy or get bailed out by someone.

    The best answer I have heard so far was actually done as a parody on "Saturday Night Live" with Steve Martin. You may find it on U-Tube.

    The answer was, if you don't have the cash, don't buy it.

  3. #3
    I absolutely agree with this. And if it's something really important that you don't have cash for, like say food... well then ya may need a different job.

  4. #4
    From what I've seen, for people who need a few hundred dollars now, but don't get paid for another week or so, their options are:

    -Borrowing from friends/family
    -Taking out an advance on a credit card (not sure what kinds of fees this entails)
    -Writing the check (knowing it will bounce, but your banks overdraft protection will kick in. The average overdraft protection charge is something like $27)
    - Pawn shop or title lender (if you have something to put up for collaterol)
    - Payday loan (cost in most states is $15-$17 per $100 borrowed)

    I don't know of a bank that will loan you just a few hundred dollars.

  5. #5

  6. #6
    Payday loans are popular for several reasons: they're quick, they're convenient, and there's no credit check. If you pay them off in the 2 week period, the $15 to borrow $100 isn't so high, it's just 15%. That's less than some credit cards that are at 21% or more. And it's certainly less than paying a bounced check fee or utility disconnect charge. If you're smart and responsible, a payday loan can be a big help in an emergency. And for those who say "get a better job" or "learn to budget," that sounds good. But try telling that to a single parent who already works two jobs and has an unexpected car repair or a sick child (with no health insurance.) There are millions of Americans who fit that profile, so please don't be so cavalier in your criticism. You, too, may some day find yourself in a financial tight spot.

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