Everyday costs are constantly rising. Food prices, utility costs, clothing, and essential personal items are adding up to more than average people make during a pay period. Those who do not qualify for traditional loans from banks or credit unions often take out high-interest payday loans out of desperation. Amounts have to be paid back all at once on the very next payday.
The situation can leave people in a vicious cycle of debt that gets worse. An extension or another payday loan has to be taken out to cover the costs of the first payday loan. Interest rates become higher and penalties abound. There are alternatives to prevent the need for payday loans.
When financial issues first become a problem, consult a credit counseling company. Representatives work with creditors on the behalf of clients to negotiate reduced balance amounts, a waiver to eliminate late charges, and lower monthly payments. Once this is accomplished with all participating creditors, the representative informs the client of the total monthly payment amount.
That amount is sent to the company and is distributed according to the agreement. Fees are nominal and folded into the monthly payment. In addition to helping with current debt problems, the company offers education regarding money management skills so clients can continue to be debt-free once current problems are resolved.
An Installment Loan
One alternative offered by non-traditional lenders, such as Maxlend Loans, is an installment loan. The interest rates are very high, but payments are made over a six-month time period. Schedules are flexible to accommodate the number of payments with individual paydays. A person who is paid every week, for example, will have twenty-four total payments of equal amount.
Someone who is paid once a month, will have six equal payments to make. Keep in mind that late fees are high so be sure payments can be made in full and on time to avoid extra costs. This alternative is a last resort that is available to people who may not qualify for a traditional loan. Do try every other alternative before applying for an expensive installment loan to save money and not further contribute to current debt.