If you are currently facing an emergency and are in need of money fast, you may be tempted to take out a payday loan. While this may in fact provide temporary relief, it is likely to cause you even more financial problems in the future. In addition, these types of loans often include higher fees and interest payments that other types of loans. Before you even consider taking out a payday loan, be sure to check out all your financial options. Below is a look at several alternatives that can provide financial assistance when you are facing an emergency.
If you are no longer able to live in your home for a variety of reasons, such as poor living conditions, domestic abuse, or your landlord locked you out of your apartment, you may qualify for help with emergency Housing. This will provide you a free and safe place to live until suitable accommodations can be arranged.
Welfare Assistance Scheme
The government used to offer Crisis Loans and Community Care Grants to help people who were facing a financial emergency. However, both of these programs have been abolished and are no longer available. To replace these programs, each local area has developed its own Welfare Assistance Scheme that is designed to help residents who are facing an emergency situation. Each program is slightly different and have different eligibility requirements. Check out your local area and see what solutions are available for you.
The government does still offer Budgeting Loans for low-income earners. To qualify, you must have been receiving governmental benefits, such as Income Support, for at least 26 weeks. If you qualify, you can take out an interest-free loan for a minimum amount of £100, which you can repay over the next two years. These loans can be a great way for you to get a handle on your finances and get the extra cash you need to get caught up without incurring an interest.
Before turning to a Payday loan, schedule an appointment with a local financial counsellor. Many counsellors offer free initial meetings or even free money management services. They can take a closer look at your current financial status and offer expert advice on how to deal with your situation. Many times these counsellors are able to offer solutions that you have not even considered before. In addition, the counsellor may be able to work with your creditors, landlord and/or utility companies to work out payment arrangements or to avoid a shut off of service or eviction.
If you have been turned down for a loan by your bank, or you think that you could not be approved for a loan, you may want to check with your local credit union. Many times these credit unions are willing to offer smaller loans to people who could not qualify for a loan from another bank. In addition, credit unions offer very reasonable interest rates that are much better than payday loan, and paying off this type of loan can help to improve your overall credit score. You should check with several credit unions in your area to see who has the best offers available.
Oftentimes when facing an emergency, people tend to react without exploring all of their options. This can cause even more financial problems in the future if you are not careful. The most important thing is that you explore all of your options before taking out any type of Payday loan. These loans can be very dangerous and make it even more difficult for you to ever catch up with your deb. Many of the alternatives offered above will provide the same, or even more, help than the Payday loan without incurring the extremely high fees and interest rates.