Let’s face it.
Everyone experiences hardships every now and then throughout life.
So, where do you turn to get the assistance that you need?
There are many ways to fill in those financial gaps through obtaining part-time gigs or borrowing from family members or lenders. While finding a second job may be the ideal option, job searches can take time and you may need extra funds ASAP.
However, there are different times of loans available and it’s important to be aware of the pros and cons to avoid that much-needed assistance turning into a debt trap that can be difficult to dig your way out of.
Credit Cards
Credit cards essentially are a type of loan as these funds must be repaid-with interest.
Having a credit card isn’t necessarily a bad thing, provided you are responsible for it. Many people utilize credit cards to keep up with the Jones’ which commonly results in their becoming deep in debt and plagued with harassing collection calls.
But this can be avoided.
If you are a credit cardholder, be sure to make your regular monthly payments and use your card for needs rather than for wants.
Personal Bank Loans
Some financial institutions offer the option of obtaining a personal loan provided you are an account holder. However, these loans may be difficult to qualify for.
If you wish to obtain a personal loan, you must first ensure that your credit is in good standing. This involves paying down any outstanding debts and increasing your income level.
You may even need to find a co-signer to secure approval of the loan.
But there are other ways….
Payday Advances
Approval for this type of loan doesn’t depend upon credit score, but rather a documentation of steady income and verification of a bank account.
With just your ID, paycheck stubs, and a blank check, you can walk out of the store with money in your pocket.
But what’s the catch?
Payday advances tend to come with high-interest rates and their easy accessibility often leads to becoming trapped in a cycle of debt. When your next paycheck hits your account, you pay off the advance, plus the interest only to once again struggle to make it until your next pay period. So, you borrow again and again.
The debt cycle endlessly continues.
Private Lenders
Fortunately, the debt trap that many people end up in is coming to light with some private lenders now providing alternative means of borrowing.
For instance, those who live in Canada and have full-time jobs may qualify for 514loans, which are installment loans that have a quick approval and payment process and are not contingent upon credit score.
Regardless of where you reside, do your research prior to borrowing. While there are many predatory lenders out there who are eager to profit from your desperation, there are others who will work with your credit score and charge reasonable interest rates. Just always remember to borrow responsibly.
Interesting Related Article: “How to Get Help with Payday Loan Debt Relief?“