Finding the best alternatives to payday loans may seem challenging, depending on what financial crisis you might be facing. Depending on the resources that you have access to, alternatives may include:
- Local charitable organizations
- Help from family and friends
- Crowdfunding campaigns
However, these options are not free of challenges of their own. For many in need of quick funds in an emergency, installment loans or lines of credit are options you ought to consider. Read on to learn more about why these products are often ideal alternatives to payday loans.
Why Installment Loans Are Excellent Payday Loan Alternatives
Installment loans are among the payday loan alternatives that people think of the most. One of the advantages that an installment loan offers over a payday loan is a longer payment term, along with smaller payments.
Another advantage to these types of loans is an easy application process. You’ll know how much you can get very easily. Personal loans make it easy to know what your payment terms will be like.
Installment loans are free from many of the issues that make borrowers reject payday loans as an option, particularly the shorter repayment time. Having to pay everything back the next payday is a strain for many borrowers. Having months, instead of weeks, to repay saves a lot of stress for borrowers.
Another downside to payday loans for many is the relatively small amount of money available. When you take out a personal loan, you can get more than you often can with a payday loan. Applying online gives you the chance to see how much you qualify for quicker.
Why Lines of Credit Are Among the Best Alternatives to Payday Loans
One reason lines of credit stand out as one of the best alternatives to payday loans is their similarity to credit cards. Rather than receiving a sum of money, you’re approved for up to a certain limit. You can draw from this line as you need, making it one of the most flexible funding options.
When unforeseen problems come up, the amount of the expense isn’t known right away. Car repairs or medical emergencies easily fall into this category. A line of credit can be helpful in these circumstances because you can take out additional funds if needed.
A difference between a credit line and a loan is that you don’t owe interest right away. Instead, you start to owe interest as you use your funds. Paying the money back essentially resets your balance so you have access to the funds again.
Another advantage of this option is that you have the same terms whenever you use more of the funds. With a new loan, you might have to deal with terms differing from your original terms. If should you have to use a line of credit over a longer time, you will enjoy having more predictable terms for better overall planning.
How Do You Choose Between a Loan and a Line of Credit?
One of your most important considerations will be your repayment schedule and terms. Do you prefer to start making a fixed monthly payment right away or pay only when you draw on a balance? Your personal financial circumstances will help determine which of these is the most appropriate option.
Your credit score may impact whether you’re eligible for a line of credit or loan. For example, people with bad credit usually qualify for loans more easily than lines of credit. However, you’ll only know what you’re eligible to receive in funding once you go through the application process.
Repayment is one of the biggest concerns, with paying more than the minimum amount desirable for getting everything paid off. Cash Link offers the best alternatives to payday loans, and you can contact us to find out what the best options are for you.