Alternatives to Payday Loans When You Need Cash Fast
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Author: The $40 billion a year payday loan industry is booming thanks to high unemployment and a lack of access to traditional bank credit. While most individuals typically think about payday lenders doing business mainly with poor people and minorities, the Wall Street Journal reports that payday loans are also increasingly being used by middle class and wealthy Americans who’ve fallen on hard economic times.
But it doesn’t matter whether you’re earning $20,000 a year or $200,000. If you’ve ever taken out a payday loan, you know they don’t come cheap. Annual interest rates of 400% or more are common, and that’s just one of the dangers of payday loans.
Fortunately, there are many better, less costly alternatives to payday loans. Here are 10 other sources of funds you can turn to when you need cash fast:
1. Obtain a Payroll Advance from Your Employer
Instead of heading to a local payday lender, march into your employer’s HR Department to inquire about whether a payroll advance is possible. Companies don’t typically publicize this option to employees. But ever since the Great Recession, a growing number of employers have began offering payroll cash advances and loans to workers, according to Alice Whinnery, CEO of LFE Institute, which provides information on financial literacy in the workplace.
2. Get Financial Help from a Local Non-Profit Organization
Regional non-profits and local community development groups are increasingly providing financial assistance for those in dire financial straits. So do a Google search for non-profit organizations in your town and contact a few to see about loans.
For example, in Arkansas, a group called Arkansans Against Abusive Payday Lending, provides borrowers with loans up to $500, which can be repaid over six to 16 months. The organization, comprised of 36 consumer, military and faith-based groups in the state, has been so effective that it helped drive payday lenders out of Arkansas altogether. As of August 2009, there are no payday lenders in Arkansas.
Read the rest of Lynnette’s article, Alternatives to Payday Loans When When You Need Cash Fast on BlackVoices
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That is great information to have; I wish I had thought of those options before I took out a payday loan. All in all it wasn’t a bad experience though because I didn’t need to take much out and I paid it back on time. The fee was a bit high, but I guess that is how it goes in that business. I used Money Mutual, the website with the Montel Williams ads.