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:
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.
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.
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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