Payday loans have gotten a pretty bad reputation in the past few years. Lenders have been charging very high interest rates, causing the loans to be more predatory than helpful. But there are other options for cash loans if you find yourself in a tight spot.
You already know you can always borrow from friends or family members. And we’re not going to recommend that you sell your belongings on Craigslist. You want money, and you want it fast. Here are a few cash loans which won’t leave you resorting to high interest payday loans.
Peer to Peer Lending
Peer to peer (P2P) lending is an interesting concept that’s become more popular over the past few years. If you’re looking for quick cash, this type of loan may not be your best bet. But there are options available for peer to peer personal cash loans. Upstart, for example, offers low interest cash loans for personal use.
There are a few P2P lending platforms available. Some offer business to business cash loans, while others are a little like crowdlending. Either way, you’ll have to demonstrate your ability to pay your investors or lenders back, and some do require a minimum credit score. The benefit of P2P is that you can get a longer term installment loan with a comparatively low rate without a high credit score. The downside is that it may take a while to find an investor.
Vehicle Title Cash Loans
Be careful with this one, friends. It sounds good in theory, but in reality it could go very sour very quickly. A vehicle title cash loan is exactly what the name implies. If you own your vehicle outright, you can borrow cash against it.
Usually you’ll visit a brick and mortar location to get a vehicle title cash loan, but some operate via fax and snail mail. You’ll need to negotiate your loan amount, then give the lender the physical title to your vehicle. The lender will place a lien on your car title, and until you pay back your loan, the car belongs to the lender. Once you repay it, the title is yours again.
Here’s where it gets scary. If, for any reason, you default on your loan, the lender will auction or sell your vehicle in order to repay the loan balance. You now have no car.
Vehicle title liens are quick cash loans, but they have serious repercussions if you default. We recommend you look at every other option available to you before you consider this one.
You don’t necessarily need to be applying for auto or mortgage financing to be eligible for loans from your bank. Short term cash loans are offered through a lot of banks and have much lower interest rates than online payday loans.
Credit unions are a great resource for cash loans. You can get a salary advance, which usually carries about a 15% interest rate. Or you could apply for a personal loan. The rates on these loans may be a bit higher if you have bad credit, but the advantage is that if you have a long term relationship with a bank, they might be a bit more forgiving of your credit score.
The best approach to getting a loan through your bank is to visit the branch and see what’s available. There may be loan products that your bank offers which they don’t advertise online. Or, if you present your case the right way, a manager may be willing to work with you on an unconventional loan. Be honest with your bank rep. They may be able to help you.
Other Cash Loans
Again, we’re not here to tell you to borrow money from the Bank of Mom. You’ve probably tapped her out already anyway. But there are a few options that you can try if you’ve tried everything else.
You could get a credit card. Some credit cards offer an introductory rate with 0% financing, and while you may have to wait a week or so for the actual card to come in, you can take advantage of the cash advance option immediately. Keep in mind that your cash advance interest rate will probably not be the same as your introductory rate, but it will still likely be lower than a payday loan’s rate.
If you’re able in your state, you could visit a check cashing store. Check cashing stores offer cash loans. They work like payday loans, but the interest rates are usually a lot lower. Where you’d be paying as much as 500% APR on a payday loan, you can usually get a loan from a check cashing business for 15-20%.
If you’re really stretched for time, visit a pawn shop. It’s not like you see on television – pawn brokers won’t bust your knee caps if you don’t pay them. Pawn shops have actually grown quite popular as an alternative to payday loans. The representatives are generally friendly, and will quite often bend over backwards to help you get your stuff back.
You can use these stores in one of two ways. The first way is with physical collateral. Bring in your vintage acoustic guitar, and the pawn broker will give you an offer. When you accept, you’ll walk out with cash and a ticket. You’ll have a certain amount of time, usually a few months, to repay the loan and retrieve your guitar. Don’t be afraid to ask the pawn shop to give you a reminder call! Most will happily do it.
The second option is for those who have already established a relationship with a pawnbroker. In many cases, a pawnbroker will offer a loan service similar to that of a check cashing store. Ask your local shop; you may not need to have an existing account with them to take advantage of the lower rates.
There’s no need for you to pay hundreds of dollars in interest to payday loan companies if you want simple cash loans. Some loan types are riskier than others, but most legit businesses will work with you in order to make sure that you don’t go broke as you try to get out from under debt. Ask around in your circle of friends, too. They may be able to offer you advice, or maybe they’ll just feel bad and give you cash.