While it’s certainly true that everyone needs money, sometimes it’s rather hard to find if you need extra money quickly.
In many instances consumers find themselves in a financial bind but, rather than applying for a bank loan, they look for “simpler” and quicker methods. While there are a certainly number of alternatives, some are definitely better than others. The 2 borrowing methods below, while not always the worst choice, can oftentimes be financially disastrous.
One of the easiest ways to get fast cash is to use a Pawn Shop, where you can use valuable items like gold, jewelry, collectors’ items, firearms and so forth as collateral to get a 30 to 90 day loan. These loans usually come with high interest rates and “storage fees” that range from 10 to 20%.
The bad aspects of using a pawn shop are that they typically you’ll get much less for an item that it might be worth if sold using websites like Amazon, eBay or Craigslist. Selling an item this way cuts out the “middleman” and can be much more profitable while also still being relatively easy and fast. The other negative is simply that, if the loan isn’t paid on time, the shop owner has the legal right to sell the item.
The 2nd are so-called “Payday Loans” which seem, on the outside, to be a relatively risk-free way of getting a short-term loan. The problem is that many people get caught up in a cycle of debt repayment that never ends. Payday loans come with very high interest and fees and, since laws about these loans vary from state to state, can quickly put borrowers in a very bad financial bind.
For example, a payday loan company in Utah was found to be charging 1564% interest in 2013, or roughly $30 in interest per week for every $100 that they loaned. Payday loans are bad enough that, in New York State, they are actually illegal.
Consumers would be much better off to ask for a pay advance at their jobs, look for “peer-to-peer” lending of some kind or ask a family member for financial help rather than take out a payday loan.
Of course the best way to avoid either having to use a Pawn Shop or a Payday Loan is simply to avoid overspending and going into debt in the 1st place. That means the spending within your means, using and sticking to a budget and cutting back on frivolous purchases wherever possible.
Putting money aside in an Emergency Fund is also extremely vital so that, if a situation arises where you need money fast for an emergency or you find yourself suddenly unemployed, you’ll have the money needed to pay bills until you get back on your feet.
While that might not be extremely easy, it’s certainly much better than losing a treasured family heirloom or getting into a situation where interest and fees are piling up so fast that you’ll never be able to pay back that loan.
