Are There Any Alternatives to Payday Loans?

Posted on 11 July 2009

As the financial crisis deepens and un-employment becomes widespread, everyone seems to be in lot’s of financial stress. People in need to pay their bills are desperate to get any cash they can get their hands on. people with financial emergencies are most venerable.

Payday Lenders survive and ever thrive in these conditions. To be honest, it is not a bad option when you need some cash until your next pay check. Payday loans can be lifesavers in some situations and are quite popular among middle class workforce. Payday_loan_shop_window

Payday Loan Industry

There are more than 25,000 dedicated payday loan outlets all over U.S., This is a booming industry that dish out more than $50 million as payday loans each year. They don’t do it for charity, they get rewarded accordingly. The Payday industry collected more than $7 billion dollars in financial charges from the consumers last year. You can estimate the profit margins yourself.

Why Payday Loans are Bad

According to most personal finance experts, getting a payday loan is like asking for more trouble. It is not always wise to get payday loans when you have other options available.

Each payday loan is taken out with an intent to solve a financial problem; Not knowing that by taking that loan, we are creating another financial problem far complex than original.

Payday loan borrowers usually end up in a debt t\rap. because they have to take another payday loan to payback the previous one. then another, then another…

Alternatives to Payday Loans

As regulations get tightened up, and payday loan industry  and loan shark are under fire from law makers and consumer support groups, It is wise to look ate some of the better alternatives to payday loans. In next few days, we will take a detailed look at following options and compare them with payday loans.

  1. Credit union loans.
  2. Small bank loans.
  3. Credit counseling
  4. Other options.
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