Finance

Check Out These 3 Best Alternatives For Payday Loans

By The Gopher - March 02, 2020
Check Out These 3 Best Alternatives For Payday Loans
Credits: nytimes.com

When you’re low on cash, payday loans sound like a reasonable option. However, payday loans may be a quite costly short-term borrowing for funding your expenses.

The typical payday loan is 400 percent in interest for just a two-week loan, as reported by the Consumer Federation of America. You may be charged between 390 and 780% APR and that is a large sum of interest on a very small loan.

Thankfully, if you need cash now, payday loans aren’t the only option. Below are just 3 of these alternatives, and all of them are cheaper than payday loans.

1 – No Interest Loan Scheme (NILS)

 Individuals with low incomes can get a small loan from the No Interest Loan Scheme that is run by Good Shepherd Microfinance. This great alternative gives loans with absolutely no interest. That saves you a lot of money in the process. The amount of money you can take is between $300 and $1,200.

 APR – 0%

Loan Perks

  • Zero monthly fees
  • Loan terms 12 to 18 months
  • Loans supported in Australia by over 250 community organizations
  • Can be used for job training, home appliances, or healthcare expenses

Qualification

One of many community organizations that provide such loans around the country can secure a No Interest Loan Scheme. You may not even have to undergo a credit evaluation during the verification process.

However, you must meet the qualification requirements. It requires a pensioner or health care card, having less than $45,000 of income per year, living for at least three months at your present home address and an evidence-based ability to repay the loan.

2 – StepUP Loans

 StepUP loans are also low-interest loans run by Good Shepherd Microfinance. The primary purpose is to provide loans to Australians on a minimal or limited income basis. You can receive between $800 and $3,000.

APR – A fixed rate of 5.99% per year

Loan Perks

  • Zero monthly fees
  • The maximum lending time is three years
  • Fixed interest rate
  • Can be used for buying cars, healthcare expenses, job education, technology, and furnishing

Qualification

You may have to approach Good Shepard Microfinance in order to qualify for a StepUP loan. When applying, you will also need to present your yearly earnings, own a health care card, or obtain Family Tax Benefit Part A and spend longer than three months in your current residence.

3 – Fair Loans

Fair Loans provides UK residents with competitive loan solutions. Evey payment is intended for borrowers to be clear and low-cost. You may calculate the overall cost of debt before borrowing because there is no interest rate or any percentages. Borrow $1,000, $2,000 or $3,000, or $4,000.

APR – The interest is charged through loan fees:

$199.50 for $1,000 loans

$299.25 for $2,000 loans

$598.00 for $3,000 loans + annual fee

$798.00 for $4,000 loans + annual fee

Loan Perks

  • Loans can be returned ahead at no penalty
  • Reduced fees if the loan is repaid early
  • $2.20 establishment fee
  • Use the loan for anything that is valuable

Qualification

You need to apply online and attach the required paperwork to receive a loan from Fairloans. Applicants are expected to be Australian, at least 21 years old, earn less than $80,000 per year, and not have more than one credit default.

Instead of Payday Loans Choose These Options

You should not have to face the high amounts of payday loans with high interest. When you actually realize that there are several other ways, you can stop yourself from making an expensive mistake.

When you’re short on cash, you don’t have to fear if you’ve chosen one of the above-mentioned alternatives. Pick one of these affordable loans if you need finances. Even though they’re not free, these alternatives are a better option than payday loans, thanks to the lower interest rates, longer repayment opportunities, and better financing conditions.

You can check for other alternatives, before you agree to take out a loan. You should do the research and analyze, compare interest rates, loan conditions, and find the one that fits your needs and finances. All that is required is a little online effort, from the comfort of your own home.