Payday loan: Are they a blessing? Each year, almost 2 million Canadians use payday loans to fulfill their needs and dreams.
Payday loans are an outstanding solution to unexpected financial challenges. They give you an easy way out when your income has been delayed or has run dry before paying your entire bill.
Online payday loans are designed for emergencies. At the same time,payday loans companies may seem to offer relief. Here in this article, we will explain the most important points about payday loans, and we are going to mention few alternative ways of payday loans.
Table of Contents
What is a Payday Loan?
A payday loan is an quick loan that must be repaid in a short period of time. These types of instant loans are meant to serve a particular portion of the population that is not financially stable enough to be approved by a more traditional loan solution.
They are an excellent option for those who need a quick cash loan and don’t have the necessary credit rating to apply for a loan at a bank.
Online payday loans are everywhere, and anyone can access them on the same day. Quick cash with few or no demands can be very helpful especially when an unexpected expense arises.
What are the Requirements for Getting a Payday Loan?
The approval rate for payday loans is very high, one of the reasons they are so attractive. Unlike other financial products, to be eligible for a payday loan, a consumer only needs to provide the following:
- Proof of income for the last 3 months
- Proof of address (electricity bill, etc.)
- Checking account for automatic transfer and payments
If you meet up these 3 requirements, you will be approved. As for how long it will acquire to get the money, if you apply online, you will probably be approved the same day.
On the other hand, you can also apply online with iCASH official website. You can get the money easily in an emergency, and the terms of repayment are reasonable and fair.
How to Get Alternatives to Payday Loans?
The short term loan industry is very lucrative. Companies involved in this market benefit greatly from the products they offer. Apart from lenders, consumers also benefit from it. Payday loan companies have marginalized old, often family-owned businesses that charge reasonable rates and terms.
In many ways, fast easy online loans are good. If you need a loan quickly, payday loan companies can do the job.
The loans are so easy to obtain. Still, if you are the one looking for alternative to payday loans, here are a few options that you can consider.
Credit Card
Credit cards are a brilliant financial tool if used correctly and responsibly. They can facilitate large purchases and can be used as a form of short-term borrowing.
That is why they are a good alternative to payday loans. When it comes time to use a credit card to buy something that you cannot pay with cash, it is important to exercise caution, as it is very easy to overspend and build up a large debt.
The finest way to use a credit card is to pay for something you can afford, either immediately or within the billing period of your credit card.
Line of Credit
A line of credit is similar to a credit card in that you can use your available limit, pay it off, and then use it again. A line of credit also has a minimum payment that must be made each month, but of course, you can pay off the entire balance at any time.
Suppose you are considering obtaining a payday loan to cover the cost of a specific expense, for example, an auto repair. In that case, we recommend that you first check with your bank to see if you qualify for a line of credit. When you apply for a line of credit, you are usually offered an interest rate that is lower than other loans.
Home Equity Loan
Using your equity to get a loan or line of credit is a more affordable alternative to a payday loan if you own a home. Home equity or line of credit loans work the same way as unsecured loans. In this case, you are using the capital you have accumulated by paying off part of your mortgage to obtain additional financing. Since your home secures a home equity loan or line of credit, you will usually be able to get a larger loan.
It is vital to note that if you need a loan as quickly as possible, this option is not necessarily your best option, as you will have to go through the bank’s approval process with which you took out your loan.
Personal Installment Loans
These types of loans are one of the best alternatives to payday loans.You can pertain for a personal loan from various lenders, whether from banks or private online lenders. The options are virtually endless, which means you’ll be able to find a loan that best suits your needs and your lifestyle.
Depending on the lender you select and the loan you are interested in, your interest rate and payments will vary. What makes a personal installment loan much more affordable than the other loan is how you pay it back. Installment payments mean you’ll have more time to pay off your loan and won’t need to take out another loan to cover the cost of the first one.
Borrow from a Friend or Family Member
It’s not at all times simple to ask someone you trust to borrow money. If you and your family borrow money, it is always a good idea to agree on all the details before the money is transferred. Consider the following:
- Do you enclose the financial capacity to repay the borrowed money within a reasonable time?
- Are you comfortable paying interest charges?
- How often and in what form will you make the payments?
- What if you can’t make a payment on time or not at all?
- Will there be a written agreement?
Conclusion:
In the above content, we have mentioned a few important points about Payday Loans, and also we have mentioned various alternatives. Hope you find the above article helpful.