A large number of individuals have become accustomed to using payday loans on a semi-regular basis. These are fairly easy to get and can be used for anything from purchasing products to paying bills, mortgages, medical procedures, or repaying certain types of loans. The main issue with these loans is the fact that as useful as they are, they can also be expensive and may also cause your credit rating to go down.
The cost of a payday loan may not seem like much if you do not use them on a monthly basis. However, they even taking out one every couple of months can still have a negative impact on your permanent financial records, making it difficult to get other types of loans in the future.
This having been said, payday loans can do a lot of damage, especially if you use them often. Luckily, there are several alternatives that you can use.
Use online money lending services if you need money in a hurry
There are hundreds of online lending companies that will allow you to borrow using their websites. You will be able to borrow up to £1,000 with nothing more than a bank account statement and an online form that you can complete using the company’s website or mobile app. The best part about them is the fact that most lenders will transfer the money to your account in under 24 hours. Furthermore, there are certain online lending companies that do not report minor loans (usually under £,1000), so your credit rating will not be affected regardless of how often you take out these loans.
The downside with online lending services is the fact that the loans will have lower upper limits and that the interest rate may be higher than what you would get at a bank. Overall, if you do not mind spending an extra £50 for the fast loan, you can borrow money without worrying that your credit score may be affected.
Borrow money from Community Development Finance Institutions
Very few people are aware of what these organisations are; however, they can be of great help if you need money to pay your bills or mortgage. Generally speaking, Community Development Finance Institutions help individuals who have been turned down by various lenders such as banks and credit card companies. The institutions offer personalised credits, making it easy for anyone to borrow money. Furthermore, all the profit is usually invested in the community.
Get a pay advance from your employer
Most employers are accustomed to paying advance requests and will give you the money if you ask for it. This is one of the best ways to get money if you need to pay for bills, mortgage payments, and medical treatments because they do not affect your credit score. Furthermore, you are not actually borrowing anything. You are simply getting part of your salary in advance, so the cost is zero.
However, you have to keep in mind that this will fragment your monthly salary and also that some employers will only dive you pay advances as an exception, not as a rule.
Payday loans are often expensive and can wreak havoc on your credit rating. The alternatives that we’ve presented are either more affordable, or they do not affect your credit score in any way. Accessing these services is easy and, in some cases, you won’t even have to go through too much paperwork. This having been said, the best option will always be to save money for rainy days, rather than borrow it. Whenever you get the chance, put £50-£60 in a savings account. After a few months of saving money, you should have enough to get over any financial issues that may arise.