Unexpected expenses may leave some folks scrambling to get their hands on fast cash, but before you sign up for a payday loan, it’s important to first consider a much better option: a personal loan. Taking out a personal loan from a credit union will leave you with more money in your wallet and far fewer fees to pay.
Personal loans can be used to pay for just about anything you need, such as emergency expenses, a big purchase, or debt consolidation. Personal loans are a very easy and quick way to get money when unexpected events come up. There is no collateral required for these loans and if you shop around, you can find great rates.
The Lure of Payday Loans
Payday lenders try to appeal to consumers who need a little bit of cash in a hurry. The promise of an approved loan regardless of credit history is often enough to compel a person to apply, and the simplified application process that mostly involves handing over a pre-dated check can make it all seem like easy money.
But payday loans aren’t as simple as they seem. Many people that get involved with payday loans can get in the cycle of using them and then it’s very hard to get out of the cycle. People who already find it difficult to make ends meet may find that they’re forced to take out one payday loan right after another in order to stay afloat.
Personal Loan Advantages
There are many advantages to choosing a personal loan over a payday loan, including:
- While payday loans have high fees, taking out a personal loan at Cobalt CU includes no fees and much, much lower interest rates.
- Payday loans are due in full quickly, whereas personal loans are paid back over a period of time, making budgeting easier.
The Federal Trade Commission recommends consumers try to find alternatives to payday loans in order to avoid those exorbitant fees while also staying away from the pattern of getting one payday loan right after another.
Personal loans can get you the money you need quickly for surprise expenses without charging you an outrageous interest rate. Consider taking out a personal loan as a much better alternative to getting involved with expensive payday loans.
Avoid unexpected financial shortfalls by mastering your finances. Get started with Cobalt CU’s Financial Audit Worksheet.