3 Borrowing Alternatives to Credit Cards You Can Use

Saturday, November 10, 2012

3 Borrowing Alternatives to Credit Cards You Can Use



Credit cards are useful but filled with both temptation and high interest costs. Fortunately, credit cards are not the only form of short-term credit that is available out there for customers. Depending on your circumstances, you may find that one of the many alternatives to credit cards suit you better than just piling more debt onto your credit card.

 Here are the three short-term alternatives to credit cards you can use: 



 Car Title Loans

Car title loans are particularly, common examples of secured loans, secured in this context simply means that you are required to put up collateral if you want to take out loan from the lender. In the case of car title loans, the assets put up as collateral are the titles of ownership to personal vehicles. Despite the seeming uniformity in their names, you should not mistake car title loans for car loans. Car loans are used to purchase vehicles while car title loans can be used for that and so much more.

 As usual, your credit rating exerts a strong influence on the interest rates and even loan conditions that you can get with your car title loan. However, putting up the title to your vehicle as collateral provides certain benefits because it increases the expected income of a lender from the loan. Depending on your exact circumstances, these potential benefits can range from an easier time securing the loan to lower interest rates and more lenient lending terms. But if you ever default on your obligations as a borrower, the lender is entitled to collect your car title as compensation for its loss.

 Payday Loans

 Payday loans are infamous but nonetheless practical examples of short-term loans. By definition, payday loans involve small sums of cash being lent for short periods of time and without the need for borrowers to put up collateral. Often, payday lenders require you to repay the payday loans as soon as your next payday arrives because they are intended to tide you over until your next payday. Furthermore, payday lenders are also known to charge high interest rates, only partly because rates of default are so high on outstanding payday loans.

 Given the downsides to payday loans, it is surprising to learn that they are also extremely popular if you judge solely based on the number of people using them. The reason is quite simple. Payday lenders tend to be undiscriminating about whom they take on as customers and make a habit of expediting the loan application process as much as possible. Getting a payday loan can be as simple as submitting some basic information to the payday loan website, submitting to a minute-long credit check, and then signing the loan contract.

 Personal Loans

 Personal loans are loans that are designated for your personal use rather than use by your business or use for a specific purpose mentioned in the loan contract. Short-term personal loans are an excellent way to cover emergency expenses without the downsides of the other options listed here so long as you have the credit rating needed to secure one. 

 About the author-

Darren Bechard writes on finance and offers tips on various blogs. Visit Wonga.com for finance options.
 

3 comments:

Valentina Zaplotina said...

Nowadays our economic situation doesn’t allow most of people to buy something with own money. They have to borrow money in different cash lending companies (for example, I’ve read about Cash Loans Online Fast company and still thinking whether or not to take a loan. I think I will try.). The author of the article is right when saying about popularity of payday loans. Look at the number of people applying for loans. It is really huge.

Sally said...

The economy is getting worse, and people are needing cash more than ever. Basically, they are loans for consumers that must be repaid on your next paycheck. They are popular, and if used correctly can help you.

devendra singh said...

Credit cards are not the only form of short-term credit that is available out there for customers. Depending on your circumstances, you may find that one of the many alternatives to credit cards suit you better than just piling more debt onto your credit card. easy guaranteed loans whether it is shorty term or long term loan.

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