How To Avoid The Perils Of Payday Loans

For almost everyone who is short on cash, a payday loan is a bad idea.  It’s going to cause more problems than it solves, and can put people into a debt spiral that’s nearly impossible to get out of.  Fortunately, there are a few things that you can do to circumvent the need for a payday loan.  All of these things are fairly easy, and carry much less risk than fast cash loans.  In this post I want to break down why payday loans cause so many problems for people, and some simple alternatives that you won’t regret later!

Why Are Payday Loans So Bad?

Many people assume that the only way to get fast cash is to get a loan.  This leads them to applying for loans without considering what their other options may be.  This normally wouldn’t be a major problem, but a loan of this type is so expensive that people simply can’t afford to repay it!  When faced with the choice between feeding the family for the next two weeks, or paying a loan back, survival instincts start to kick in.

How expensive are these loans?  On average, you’re going to pay 25 bucks for each 100 that you borrow.  This equals out to $700 costing $875, or a major chunk of your paycheck gone before you have the opportunity to spend it on something else.  The only way that you can make this work out in your favor is if you can make a lot more money between the time that you accept the loan and you pay it back.  If you don’t bring in some extra cash you’re going to end up just as broke next payday as you are today.

This problem becomes compounded if you’re late or fail to pay the loan back.  The interest rate and fees go through the roof as soon as your account hits collections, and it will quickly become more debt than you’re going to have a shot at paying back.

So What Else Can You Do?

The amount of time that you have from now until you absolutely need cash will determine how you get it.  More time offers many more options, so read through this section with your monetary deadline in mind.

A major chunk of your paycheck goes to paying taxes, and with some simple adjustments you can take home all of that cash for a few paychecks.  Reducing the amount that you withhold from your paycheck will put a major bump in your next payday.  You can do generally do this through your HR department, or manager in small companies.  The risk here is that if you don’t adjust it back to where it was, you’re going to be stuck paying a ton of taxes next year.  Don’t get used to the extra money, just use it for a couple of checks then go back and fix it.

If you have a lot of stuff laying around your house that you don’t really need, you can turn a lot of it into cash.  There are a lot of ways to do this, so choose whichever is going to be the easiest for you.  Craigslist is a good way to sell off a lot of stuff rather quickly.  You get the option to set a price, which is going to yield more cash than going somewhere like a pawn shop.  Another option is to throw together a quick yard sale.  These work really well if you live in a naturally busy neighborhood, but take some promotion if you live somewhere that’s quiet.

For those that have extra time on their hands, you can pick up some odd jobs to help make ends meet.  Jobs that pay cash like this will range from day labor to some pretty bizarre stuff, so be picky with what you choose.  To find a gig like this, turn to the classified section of your local paper or the “etc.” section of Craigslist in your area.  There are tons of different options out there, so be sure to find something that you don’t have a problem doing.

There are a ton of different alternatives to payday loans out there.  Any of the three discussed above will put a major chunk of cash in your pockets fast.  The key is to be both creative and resourceful and you’ll have no problem at all getting the money that you need to keep your life moving in the right direction.