Before Taking Out a Payday Loan, Consider a Personal Loan
It’s easy to get stuck in a paycheck to paycheck cycle, especially when you’re in debt. And, unfortunately, there are many debt traps that only exacerbate the situation. Payday loans are the notorious debt trap . If you are short on options, consider a personal loan first.
Many credit unions and public banks offer personal loans, and getting them can be easier than you think. Yes, you should still return them, but interest rates and commissions are generally much lower. NerdWallet did a study on payday loans and found that, on average, borrowers paid $ 459 in commission on a $ 300 payday loan that was withheld for five months. Those who borrowed from a credit union or local bank paid only $ 13 on the same terms.
Of course, it is easier to take out a personal loan if you have good credit. But the NerdWallet study also showed that borrowers with bad credit or non-existent credit history can get comparable loans.
The bottom line is that it’s worth a try. Payday loans are designed to pay interest – some of them have rates up to 500-600% . Before making this decision, explore all your options. Check out the full NerdWallet post for more details.
Need cash? Personal loans cost $ 446 less than payday loans | NerdWallet