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Are you searching for a way to go about dealing with Payday Loans and Lenders, or how to find other low-cost Personal Loan Products that have appreciable interest rates? Then sit tight and make sure you read to the end because, in this article, I am going to feed you with information on how to find low-cost Personal Loan Products and also provide assistance to complete the Payday Loan Cycle.
COMMUNITY BANK OR CREDIT UNION
I advise you to make sure you call your Local Credit or Community Bank before getting a Payday Loan because many of these lenders offer financing products directly to consumers. Also, make sure you do not use a primary lender like big banks. Open an account with your Local Credit or Community Bank if you do not have any, and apply for a low-interest rate Credit Card, Small Loan or Stretch Loan.
Many Community Banks and Credit Unions do not always advertise small dollar or low-interest rate loans but most of them offer these services to their members, and it is often called Stretch Pay Loans. It may interest you to know that borrowers pay much lesser when they use Community Bank than when they use National Lenders, and the interest rates are much smaller than using Payday Lenders, ranging from 10-15%. I want you to know that a Cash Advance or Small Personal Loan on a Credit Card from a federal government authorized the Credit Union cannot be more than 18% interest annually. Make sure that you keep a Credit Card with borrowing capacity from these banks in case of emergency expenses. Also, make sure the Credit Card is used only for emergencies, and endeavor to pay off the balance as soon as you could.
BORROWING FROM FRIENDS OR FAMILY MEMBERS
Another way to get a Low-Cost Personal Loan is to ask family members or friends to lend you money. The best method to go about this is to make a written agreement with them, in which you agree to pay them back. Spell out the terms in the agreement so as to avoid misunderstanding and disagreement. If you do it right, this will be beneficial to both of you because, when you receive a Personal Loan at a lower cost, your friend or family member receives some additional money from the interest you pay him or her.
CREDIT CARD ADVANCE
Though this option may not be the best, the Consumer Federation of America said using Advance Credit Card is better that using a Payday Loan. I will advise that before embarking on this venture or signing anything, make a broad range of comparisons to get the cheapest card with the lowest interest rates to make sure the fees are reasonable. Look for the Credit and Cash Advance that is the least expensive. Also, take far-reaching note of this, before signing any loan contract with a Credit Card Company or commit yourself to incurring debt, make sure you do research, and compare the annual interest rate (APR), percentage rate, and finance charge in dollars.
Be informed that, except bank overdraft loans, the federal government regulations and law require all sources of credit to quote credit costs the same way to enable you to compare costs between different companies and their various loan services.
Credit Card Debts Compared To Payday Loans – Loan Payment Calculator
Let me elaborate more on the use of Credit Card Advances and the differences between the cost of Credit Card Cash Advance and a Payday Loan. Although Cash Advance is by no means having low cost, it will still cost a fraction of what Payday Loan will cost you. For instance, let’s assume your card has an average 20.23% APR Interest Rate, 3% Cash Advance Fee with a $7 Minimum Fee, and no Grace Period. In this case, if the Cash Advance on your Credit Card is $500, and is repaid in four months, it will cost $48.86. But on the other hand, a $500 Payday Loan that is pre-paid in four months may cost somewhere from $500 to $700 if the rate is $8.75 for each $50 borrowed.
ALTERNATIVE level COST LOANS
1. Military Service Membership
Most military bases partner with Non-profit Credit and Debit Counseling Agencies, which offers tips on various loan services that are not expensive, they advise consumers on the best way to rebuild their credit and help them reduce debts over the long term.
Consumer Federation of America recommends that, if you are a military service member, you should contact a Local Military Charity or a Relief Society for your branch of the service where you may get free financial help and resources for emergencies and unexpected expenses. Even if you can’t get a direct financial assistance, you would, at least, get a low-cost Personal Loan Service that will be appreciable.
2. Personal Loan From A Small Loan Company Or A Signature Loan Company
It is true that Small Loan and Signature Loan Companies charge from 24-48% annual interest rates on their Personal Loans and allow installment payments for several months, yet, it still costs less than a Payday Loan. Let me illustrate this for the sake of clarity. Let’s say you went to a Signature Loan Company and borrowed $500 from them at 36% annual interest rate and repay it by monthly installment for four months; it will amount to $38.04 total interest costs. Whereas a $500 Payday Loan renewed every two weeks for the same period of four months will amount to a surprising total cost of $700 with a rate of $17.50 for each $100 borrowed.
3. Overdraft Protection
This system enables you to transfer money from your Savings Account, Checks that overdraw your account, Bank Credit Card, or a Line of Credit that you may have to cover Debit Card transactions. This system may not be the ideal type; nevertheless, it is less expensive when compared to borrowing from a Payday Lender, and paying for a bounced check fee at your bank. To obtain this plan, go to your Local Credit Union or Community Bank.
You have to be very cautious to avoid any courtesy overdraft programs that your bank may offer you because they are much more expensive, and you will be charged an expensive bounced-check fee for overdrafts. At some instance, they may allow you to overdraw at the Local ATM or with Debit Card purchases, which may lead you in a difficult financial situation.
LOANS THAT YOU SHOULD AVOID
After all, that has been said; I will not forget to let you know that some Personal Loan Products may be more expensive than Payday Loans. Don’t be surprised; it’s a reality. An example of these includes Car Title Loans or Pawn, and Income Tax Refund Anticipation Loans; that is why Credit Counselors advise consumers to avoid sources of High-risk Credit and High-Interest Rate and Cost. I have an alternative you need to consider, which is; Stretch Pay Loans.
STRETCH PAY LOANS
Some Local Community Banks and many Credit Unions have started offering this product to their customers, and some are even offering it to the public and those who are not their customers. Stretch Pay Loan is a competitive product with interest rate and fees that are much lower than Payday Loans and Lenders. Therefore, this product is an excellent alternative to Payday Loans. This loan product offers better APR rate and a longer payback term than what Payday Loan Companies offer their customers. It allows various lenders to pool their loan loss reserves.
1. Stretch Pay Loans As An Alternative To Payday Lending
This product is specially created to help those who need some short-term cash. Many consumers are suing it to pay for short-term bills and unexpected expenses without being abused by greedy lenders or high-interest rate Payday Lenders. This program is a real alternative to many products in the market. This plan helps members of Credit Unions and Banks with a small-dollar loan that would carry them until their next regular scheduled paycheck. It serves as a short-term financing to consumers.
2. How Stretch Pay Loans Work
It is clear that the various Lenders that offer Stretch Pay Loan slightly vary regarding interest rates and how the program runs. In general, the loan is designed to make it easy for consumers or Credit Union Members to obtain cash to pay bills and expenses. Just like I said earlier, it allows consumers to get short-term credit, but before another advance is permitted, the customer or borrower will have to repay all the outstanding balances of the loan with a reasonable but slight amount of interest.
3. Advantages Of A Stretch Pay Loan
The benefits of a Stretch Pay Loan include the following:
It’s a cheaper and more economical alternative to Payday Lending.
Fees and interest rates charged are much lesser than Payday Lending.
It helps build a positive credit history
Help put the borrower on a long term financial stability
Allows borrowers the ability to access additional credit in the future
Hope you found this article useful in obtaining a Low-Cost Personal Loan.