Are you one of the millions of Americans who are struggling financially right now?
Maybe you’ve lost your job, or maybe you were just temporarily out of work, but you’re still trying to catch up on your bills. For whatever reason, you’re in a bind.
Are you thinking about borrowing a little money to pay for everything you need? Join the club. Tens of thousands of people are doing the same thing.
Unfortunately, borrowing money can come with a high price tag, potentially leaving you in an even bigger pinch. But there are affordable ways to do it. We’ve broken down some of your options to help you make the best decision.
A Quick Note on Payday Loans
If you still have an income, payday loans can be tempting because of their immediacy. You can get money right away, right? Just bring proof of income to the nearest check-cashing joint and bam, you’re done.
But the interest rates and fees that come with a payday loan can top 500% or more, leaving you with thousands of dollars owed on top of the few hundred bucks you originally borrowed.
Payday loans can send you into a cycle of debt. Take a look at some of these alternatives instead:
1. Low- to No-Interest Credit Cards
Ah, credit cards. When your bank account is running low, they can be a lifesaver if you need to buy groceries or pay your electric bill.
But you have to make sure you can pay them off at the end of the billing period. If not, you could get hit with some pretty high interest rates (APR). The average interest rate in 2020 so far, according to the Federal Reserve, is around 16%. That’s not something you want to take on, if you can avoid it.
That being said, there are credit cards that offer introductory periods with low-to-zero APR — some for up to 18 months. If your credit is good, and you can still make monthly minimum payments, this is a free (or cheaper) way to borrow money.
Before making a move, you’ll want to compare your options. For each card, take a look at its APR, rewards, fees and any fine print.
To shop cards you qualify for (or if you want to work on getting your credit score up), a free website like Credit Sesame can help. It’ll show you steps you can take to improve your score, plus show you which credits cards you can qualify for. It takes 90 seconds to sign up.
2. Personal Loans
If you’re not able to pay off your credit card fully each month, a personal loan could have better rates. This can be a good choice for people who need to borrow more than a few hundred dollars.
If you need to borrow up to $50,000, AmOne will match you with a low-interest loan. It takes all of two minutes to see your options — no need to stand in line or call your bank.
The interest rates are pretty good — they start at 3.99%.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
If you’re worried you won’t qualify, it’s free to see if you qualify online. It takes just two minutes.
3. Payday-Loan-Alternative Apps
If you need to borrow a couple hundred dollars to get you to your next paycheck, there are some apps that just might be able to help you out.
Brigit, for example, takes little time to download, and it doesn’t require a credit check. It lets you borrow up to $250, which could be what you need to avoid a pesky $35 overdraft fee. There’s no interest, though you’ll pay a $9.99 monthly fee.
There are also online banks that’ll help you out in a pinch. For instance, Chime has a feature called SpotMe, which allows you to overdraw on your debit card purchases by up to $100 without fees. Sambla offers financial assistance through their network of 30+ lenders in Sweden via their lån utan UC program.
You’ll have to qualify to use this, but it’s worth looking into if your checking account balance is getting low.
So before you do something drastic to get out of that financial pinch, do your research to figure out the best way for you to borrow money and ease some of your money stress.
This story originally ran on The Penny Hoarder.