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Four options when you need cash fast

[Nov 24, 2010.]

 

In the midst of a cash crunch, most people think first about finding the easiest way to get money. In many cases, fast payday loans are the best option. Even personal finance expert Suze Orman admits that sometimes a payday loan is a viable option for consumers, although she also tells people that paying back quick payday loans should be the number priority for borrowers. Besides thinking about the fastest way to get cash, consumers should also carefully evaluate how they will repay the loan.

Option One: Payday loans. One of the main reasons people turn to instant payday loans, in addition to the fact that they are fast, is that even consumers with poor credit can usually get a loan. Many payday advance loans are approved simply based on a paycheck stub to prove the borrower is employed. Upfront fees are generally low, and if you repay the loan on time, you can avoid excessive interest charges. The key is to pay the loan back immediately and to use these loans only for a true emergency.

Option Two: Personal loan. Some community banks and credit unions offer unsecured personal loans to their customers, although generally these require good credit and an account or two with the financial institution. One problem: if you need cash fast, applying for a personal loan might take too long. The bank will need to check on your income and credit before making a decision on the loan.

Option Three: Peer-to-peer loans. Websites such as Prosper.com or LendingClub.com allow individuals to create a profile and request a loan. Different individuals can then loan small amounts until you reach your goal. Another option to consider is asking a relative or close friend for your emergency funds. Documenting the loan will make your lender feel more secure about your repayment plan and will ease tax complications from the loan.

Option Four: Cash advance on a credit card. A cash advance on a credit card can be expensive and usually carries a higher interest rate than regular purchases. Be sure to compare the different options for repaying a cash advance or direct lender payday loans, because the payday loan may actually be less expensive if you pay it back fast.

Regardless of which option you choose to resolve your current financial crisis, the fact that you need to borrow money quickly is a signal that your budget needs help. Gather your bills and bank statements and write down everything all your income and assets. Track your spending to see if you can find a way to save a little bit of money out of each paycheck. If you need help, contact a non-profit credit counselor (try the National Foundation for Credit Counseling) who will work with you to manage your money and avoid an over-reliance on too many payday loans.

 

About Author:

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance, and business.

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