Payday loans have alternatives

For a lot of people who have been obtaining such short-term loans, a state simply shutting down an industry may seem astonishing. North Carolina, aware that the majority of lenders were violating state financing laws, responded by simply closing the payday loan industry down. North Carolina recently clamped down on cash advance loan stores, effectively putting them out of business.

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There are alternatives available for people who need money, and a couple of them are more reasonable choices than the four hundred percent annual interest rate loans charged by these quick cash stores. For borrowers who can't, or do not wish to, do business with payday loan stores, there are alternatives.

Listed below are some alternatives to payday loans and their approximate cost when expressed as an annual interest rate:

Credit card bill paid late. The fees for paying your credit card bill late can run fifteen to thirty dollars, which would amount to a 200-400% rate, perhaps more affordable than a payday loan. You should know that paying late on your credit card debt could also instigate the "default" rates, which could cause the rate charged to your credit card account from here on to be as much as 30%. Late payment on your charge card is not a good alternative to a quick cash loan, as there are long term consequences.

A paycheck advance from your boss. Inquiring about such an advance on a payday often would probably be a poor idea. In all likelihood, such a payday advance would have a cost of close to nothing, making it a cost effective choice. Not all businesses are able to give their workers a loan on a paycheck, but a few may, and it is always worth taking the time to ask.

Short term borrowing from credit unions. It would be well worthwhile to talk to your local credit union to see if they can assist you with a small loan. Interest rates for temporary credit union loans often run less than 20% annually, making this option a bargain if it is at your disposal. A few small credit unions are now promoting short-term, small amount lending for their members.

Bank bad check fee. Many banks or credit unions continue to permit no overdrafts. Formerly, writing a personal check for more cash than you had in your checking account would result in a bounced check and fees from both your bank and the business to whom you wrote the personal check. A great number of banks now provide overdrawn amount protection, where the bank will honor an overdrawn check for sums of up to a particular limit. Modern overdraft protection comes with a fee, which averages $25-30 for each and every check. For a $200 bad check, the charge would amount to an interest rate of about 350%, which is comparable to that of a quick cash loan. The price applied for overdrafts isn't really a fee, as it is intended to be a penalty, but if you must do it and you are willing to pay, than it works as a benefit.

Before you seek out a high interest source of cash, keep an eye out to see if you can locate a more reasonable deal. There are other choices available that might be better suited to your financial troubles than quick cash loans or cash advance loans. Cash advances are occasionally good for short term, rainy day cash. You don’t want to use them for long term borrowing, as the cost can be excessive. There are better choices for long term borrowing.