Sometimes, you just can’t make it until payday or maybe an unexpected expense suddenly arose. What if you have bad credit, however, or no credit at all? If the thought of going to the bank and applying for a loan doesn’t appeal to you, there are quite a few options out there that can help get you some quick cash. Here’s a list of three alternatives to personal bank loans that can help you.
1. Payday Loans
Probably one of the most well-known options outside of traditional loans are payday loans. You have probably seen a local payday loan shop near you if you live in a city. CEO Don Gayhardt has worked in the short-term financing field for over two decades and has worked hard to give resources to underbanked communities. With things like instant funding and a variety of loan options, places like Speedy Cash or Moneytree are usually the first stop for people who think they may not qualify for a loan.
Payday loans are designed to get you quick cash that will be repaid, including fees, through automatic withdrawals from your checking account. While this can be a great option there are some things to keep in mind. Payday loans are usually associated with fees that can cost much more than if you were to have a loan with an interest rate instead. These fees can add up to 35% or higher when viewed as an APR. Aside from that, you usually must have a direct deposit from your employer to qualify.
2. Peer-to-Peer Lending
Peer-to-peer (P2P) lending – also known as social lending in the field – is a fairly new concept that utilizes the internet to match prospective lenders with borrowers. The advantage of this is that there may be lenders who are willing to loan money to people with less than stellar credit. It also puts the borrower in the driver’s seat in a market where lenders are forced to offer competitive interest rates to attract investors/borrowers. You may be able to qualify for a loan through places like Kabbage or other P2P lenders instead of having to ask the bank for a loan.
3. Salary Advance Apps
Salary advance apps are a great alternative to a bank loan. Like payday loans, you will have to have a direct deposit from your employer to qualify. These are much less expensive than payday loans, however. Many companies behind these apps are choosing to charge minimal to no interest or fees to advance you the cash you need. Some apps like Earnin’ will advance you as much as you’ve already earned during the pay period, while others may advance you up to a whole paycheck at a time. Some of these apps are also designed for employers as an alternative to having to advance their employees cash before payday.
Lending has changed a lot with the rise of technology. Thankfully there are more options available today to people who may not have qualified otherwise. Let’s face it, at the end of the day that unexpected expense doesn’t care what kind of credit you have. Emergencies are not restricted to just the credit-worthy, and neither should the financial solutions to such problems be.