It’s no secret that the pandemic has caused a lot of financial turmoil. If you are struggling to pay your bills and keep up with your finances, luckily there are a few options when you need money. It is only natural to want to avoid payments and high interest of credit. With a variety of options that have both drawbacks and advantages, you can choose the lending method that works best for you and your financial situation. Here are a few alternatives to traditional credit that may help you get through the pandemic.
Borrow from Friends & Family
Of course one of the best ways to pay for your bills during the pandemic is to borrow from your friends and family. Not only will you not have to pay interest, there will likely be less pressure. While it depends on who you are borrowing from, it can be a great way to pay off bills and relieve yourself from some financial stress. If you don’t have anyone close to you to borrow from, it may be time to look into loans and other options.
One of the most common credit alternatives are personal loans. A personal loan is a loan that you apply for with your credit score, which comes in two types. Fixed rate loans are determined by the market, with interest that stays the same as you pay back the loan. On the other hand, variable loans are based on your credit score and your financial stability. While personal loans vary quite a bit, if you can get a good deal they are great for when you need money and don’t want to open up a credit line to do it.
If you have debit overdraft protection, another way to avoid credit is to utilize it. Or, if you don’t have protection you can negotiate an arranged overdraft situation with your bank. This is a great option for those who need a little extra money before you get paid. Furthermore, if you can overdraft from your savings that is another way to avoid credit. Make sure that you won’t get charged for the overdraft and you’ll be able to use it to your advantage.
Also known as payday loans, short-terms have high interest. They can even have higher interest than credit cards, but they also provide cash on the same day when you have an emergency. When you are desperate for money, a short-term loan will offer funds you need. Be sure to pay back the money you owe immediately or the interest will pile up greatly. While short-term loans are made fun of constantly, they can offer what you need when you’re in a bind.
A modern option for when you are struggling financially is an installment loan. These online loans provide money quickly and offer long-term repayment plans. With frequent multiple payments, installment loans can help you get through a financial hole and work towards prosperity. You will be able to get the money you need quickly, but it does depend on where you are located. If you are eligible for a loan in your area, an installment plan will help you pay the money back in good time.
Life hasn’t been easy during the pandemic. So many people are struggling financially, having trouble paying their bills and getting ahead. People are out of work or have less work. The economy is unstable. It is important to get out of your hole. While loans aren’t a sure-fire way to economic stability, they can help you pay for your bills.
Every credit alternative has its benefits and negatives. Some have high interest but can provide funds quickly. Others you can pay back more slowly with lower interest. Whatever your financial situation, you should take a look at what credit alternatives will be useful to you. While loans can provide the funds necessary to get you through the pandemic, you will need to have a plan to pay the money back and work towards avoiding borrowing money you don’t have in the first place. Still, it is good to have options. Utilize them to the best of your ability.