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Alternatives to Payday Loans
#11
(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.

They're not really saying that they will take money from you retirement savings. The article only says that you can borrow money from your retirement fee as long as you follow the rules. You can borrow money from your retirement saving without any interest as long as you pay it within one month. If you pay it on long term, the interest is very minimal.
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#12
@mar06 it would help if you share what bad things you heard, so that we can decide for ourselves what to do. I actually don't think that this is a bad idea. If you can borrow money without paying any interest, this makes a lot of sense. You will also not be interefering with your savings because you have to repay it in a month.This makes a lot more sense than a payday loan that charges you exorbitant rates of interest.
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#13
(01-09-2018, 02:46 PM)chikatilo Wrote:
(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.

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.

For some people, due to ChexSystems report (a sort of "credit score" for your history of banking and if you have accounts in the negative or in collections), this might not be an option to go to a credit union even.
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#14
Pawnshops i think. If you have something in your possession that is valuable that you are willing to use as collateral and if you are sure that you can get it back with a little interest included. Some pawnshop offers so little interest so i am considering it as an option for emergency uses or such things. Some of them here gave you at least one percent only for the first month. Even if you can't redeem it by a month, you may renew it by paying the small interest then it is good for a month again.
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#15
A credit union is really a great alternative for payday loans because it offers lower interest rates. Here, we needed to be a member first and you needed to open an account before you can make some loans. Borrowing from family and friends are also good especially if they don't offer interest rate you must be lucky and thankful that they won't charge you back you just needed to pay back the money that you owed.
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#16
I've found another alternative for US residents: Low Income Housing Energy Assistance Program (LIHEAP). It's a is a federally funded program that helps low-income families cover electrical or utility costs. Unfortunately not everyone who is eligible to receive benefits will get them, but it if someone is in need, it is worth applying.
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#17
There are several payday loans depending on your location. In the US, there is a union called the National Credit Union Association NCUA, The union gives loan that is alternative to a payday loan.

The condition is pretty straightforward, you must be a member of the union for at least a month before you can request for the loan. The loan cannot be more than $1000 and you must pay back the money between one to six months. And the interest rate will not exceed 28%.

I hope this helps you.
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#18
I thinks the best alternative to this is to go to your friend and ask him or her to lend you money because its not easy to a friend to say no when you ask a help or a favor because someday they will need you just a 50-50 fair.
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#19
(01-25-2018, 03:50 PM)OlaSidiq Wrote: There are several payday loans depending on your location. In the US, there is a union called the National Credit Union Association NCUA, The union gives loan that is alternative to a payday loan.

The condition is pretty straightforward, you must be a member of the union for at least a month before you can request for the loan. The loan cannot be more than $1000 and you must pay back the money between one to six months. And the interest rate will not exceed 28%.

I hope this helps you.

Thank you for sharing this information. I did some research on NCUA and I found out the interest rate to payday alternative loans is indeed capped at 28%. But they also seem to offer another type of loan and the ceiling if its interest rate is only 18%. Have a look at this article: click

My question is what is the difference between these two types of loans?
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#20
Personal Installment Loan – One alternative is a personal unsecured installment loan from a responsible lender such as a credit union, bank or other financial institution. According to the Center for Responsible Lending, in contrast to payday loans these products features, Minimum 90-day repayment.
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