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Alternatives to Payday Loans
#1
US News & World Report has a list of payday loan alternatives. I disagree with this article because they include taking money from your 401(k) retirement savings as an alternative. I would never, ever do that to cover a $300 to $500 expense.
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#2
(01-09-2018, 01:37 PM)Michael Puttman Wrote: US News & World Report has a list of payday loan alternatives. I disagree with this article because they include taking money from your 401(k) retirement savings as an alternative. I would never, ever do that to cover a $300 to $500 expense.

Why would you never do that? 

I would do it if I was in financial trouble. As pointed out in the article, this loan doesn't require a credit check and you pay the interest back to your own account. I'm absolutely sure the interest rate will be much less than a payday loan's interest rate. Do you happen to know what it actually is?

Out of all the options they suggest, I think the best one is joining a credit union. The application fee is small and you have to have been a member for at least a month. It doesn't sound bad at all.
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#3
Credit cards can be a great alternative to payday loans. Even though credit cards should be avoided in emergency situations, it is still better than using a payday loan. A credit card allows you to break the payment up and if you can pay it off in just a few months, you will not get yourself in the same payday loan cycle.
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#4
I think you should use credit card to pay that off, but it's still pretty risky if you can't pay it off in months.
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#5
I think the best is the credit card bank its easy to use and reliable in all of us. Its risky if you can't pay it in a month because some of credit card have an interest. But its the safest and i think the best alternative.
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#6
Really, the best alternative to any loan is to go without and save up. Then, when you have enough to buy what it is you want, to go and get it. That means that the item is yours and you don't end up paying extra to have borrowed the money in the first place.

Sometimes though there can be times when we need some emergency cash and not have any until payday. Say for example the boiler conks out and it's freezing cold at the time. You are left with no hot water and no heating so a quick loan like this is a great idea.
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#7
I would rather get out of trouble now and plan for the future when I have the opportunity, rather than be a mess now and have money when I retire! Granted I'm only in my twenties so retirement is a long way away, but if an emergency came up that I needed money for desperately, I would be totally okay with taking money from my retirement fund for it. Obviously not for "I need this expensive pair of shoes" but for "my mother is in hospital and I need to pay the bill"? No question about it.

Granted we can't access our retirement savings here anyway unless it's to permanently move overseas or to buy a first home
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#8
Well, my first thought in some sort of emergency situation would to be to lend from my family. If I couldn't do that for whatever reason, I would rather opt for a payday loan than take anything from the retirement savings.
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#9
(01-13-2018, 07:29 AM)Sase3119 Wrote: I would rather get out of trouble now and plan for the future when I have the opportunity, rather than be a mess now and have money when I retire! Granted I'm only in my twenties so retirement is a long way away, but if an emergency came up that I needed money for desperately, I would be totally okay with taking money from my retirement fund for it. Obviously not for "I need this expensive pair of shoes" but for "my mother is in hospital and I need to pay the bill"? No question about it.

Granted we can't access our retirement savings here anyway unless it's to permanently move overseas or to buy a first home

I totally agree with you on this one. 

Not that I can access my retirement savings in Bulgaria even if I wanted to. Here we pay  social security fees to the government, so that we get a pension when we retire, but no one would allow you to touch this money. It's doesn't matter if your mother got cancer and you need finances for expensive treatment that can save her life. You simply don't have the right to withdraw from your social security savings. If you move abroad - you lose them. Talk about being screwed up...!!  Angry
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#10
401k accounts are generally not to be touched, that's a little weird to say to take that money out to pay back loans. I mean, the sooner you pay it off the better, yeah, but that's a very... roundabout way to do it in my opinion, though I suppose if some sort of other collateral was on the line I would do it but I probably would not put up any additional collateral personally. Obviously emergencies come up but I don't think a loan repayment is one of them.
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