How Good Are the Alternatives to Cash Loans?

When you are in a financial emergency, you would naturally consider cash loans, which are available in hours. At the same time, these products have got bad press for their high interest rates. That is why many experts are proposing alternatives. The big question is whether these are really better.

Credit Cards

The major advantage of credit cards over cash loans is that the money is available instantly. You simply need to go to the nearest ATM to get the cash which you need. The cards typically have lower interest rates as well. Most products come with a rate of around 20% per year while the quick cash credit products typically carry rates of over 500% per year. However, this does not necessarily make the use of credit cards less expensive.

Firstly, when you take out cash using a credit card, there is a considerable withdrawal fee which you have to pay automatically. It is usually high enough to put you off taking out small amounts of money. Furthermore, interest is charged from the day when you take out the cash. If you do not repay the due amount in the next month, the interest payment will become even higher and so on. With a simple loan, on the other hand, you can choose a shorter repayment term to save money.

Loans from Friends and Family

These are perhaps the least expensive of all credit options including cash loans. A family member or a friend may not even ask for interest to be paid. The problem with these loans is that they are often hard to get. The people who are close to you may not have enough money to help you out. Besides, they may need some time to think about lending you money and to arrange the loan. In such cases, you may not get the cash fast enough to resolve the urgent problem.

Peer to Peer Lending

This form of lending is gaining ever greater popularity. It typically uses online platforms where individuals who are able to lend money meet with ones who need money. The two parties arrange the terms of the deal and the cash is transferred straight away. The individual lenders do not run credit checks, but will typically want to see proof of income. In some cases, they may require collateral as well.

Peer to peer lending may turn out to be more expensive than the cash loans especially if you are in desperate need of money. Furthermore, since the lender is not regulated in any way, you may get into serious trouble.

Overall, it is up to you to weigh the pros and cons of the different options including cash loans before you make up your mind.

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How to Get Out of Student Loans Quickly

Congratulations on your recent graduation! It's a great feeling to have accomplished a goal like graduating from college. Adulation and a great party follow the cap and gown ceremony. Then, within six (6) months you start getting notices in the mail. Your loans become due. Maybe you haven't even had a chance to get that dream job, or any job with this present economy. Whether you're working or not, there are a few things you can do immediately that can help you stay in control or even get out of student loans quickly.

First, you must understand and know whether you have federal loans or private loans. How can you tell. A visit to the National Student Loan Data System will give you a list of federal loans only. If you don't see the loan listed there, then it's a private loan.

Second, deal with the federal student loans first by immediately consolidating them after graduation. If you sign up for automatic payments, you may be eligible for a slight interest rate reduction. If you cannot afford the Standard repayment on your federal loans there are other options for repayment. You can explore an extended repayment; graduated repayment; or extended graduated repayment. There are also income sensitive programs like Income Contingent; Income Based; or Pay-As-You-Earn programs. However, you don't automatically qualify for any of the available programs and that is where it gets confusing. Also, your loan servicer doesn't necessarily want you to know about these programs. In fact, their low level representatives may not even be aware of your options. Vist Student Loan Borrower Assistance (dot) org for more information on the available programs.

Some federal loans can be forgiven or even discharged without filing bankruptcy. There are public service forgiveness, teacher forgiveness, and full discharges if you become totally and permanently disabled. Also, if you never received your GED or high school graduation and the school falsely certified you for entry, your loans may be forgiven. Unpaid refunds and closed schools qualify some for forgiveness of their loans.

Student loans can be discharged through bankruptcy, but they must meet an undue hardship test first. It's a 3-part test that requires a present undue hardship, a continuing undue hardship, and a look back at what you have done to increase income and reduce expenses and the effort put into repayment of the loans.

Third, address private student loans only after you have your federal loans on an affordeable repayment plan. The reason being is that the federal government can collect on its loans forever. Private student loans generally have a four (4) year statute of limitations (California Law) on their ability to take legal action to collect the loan. Unfortunately, private student loans provide no safe harbour or alternative repayment options like federal loans. However, you can control private student loans through a court approved repayment plan under Chapter 13 of the Bankruptcy Code in order to buy time to improve your financial situation and obtain that dream job.

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