Monday, June 17, 2013

Troubled Ways to Pay off your Bills (Guest Post)

It can be easy to think that paying bills is more important than anything else. This is why many people choose to take out loans to pay them with. This is not a sensible idea as they will end up costing more in the long run. However, if you have no other options, then there are certain types of loans that should be avoided at all costs.

Payday Loans
Payday loans may seem harmless enough, like You just borrow a small amount of money to keep you going until you next get paid, when you pay it back. If you can pay it back, although it will cost you, they are okay. However, if you cannot pay the loan back then the trouble starts. You will be charged fees and the interest rate may go up and the costs can add up to a lot of money.

An overdraft can seem very simple. If it is authorised, then it will not cost that much. However, if it is unauthorised you could be charged on a daily basis. Even an authorised overdraft can be dangerous though because you can easily not pay it off and then the costs can mount up. You are not expected to pay it and so money will not be demanded and unless a pay check goes in, then it may be easy to just leave it there gaining interest.

Logbook Loan
A logbook loan will give you money based on the value of your car. The car will be used as collateral though and so if you do not make the repayments on the loan it could be taken. This could mean that you will not be able to get to work and you could lose your job.

Borrow from Friends and Family
Borrowing from friends and family may seem like a cheap and easy way to get money. However, if they are suddenly short of money then it can put a strain on your relationship with them as they may want it back and you may not have it.

It can be better to phone the people you owe money to and see whether you can pay them less than you owe for a while. Find out whether you can take a payment holiday or whether they have any ways that they can make repayment easier. See whether you have anything to sell to make the money that you need or try to earn money elsewhere before resorting to these types of loans.



Sandy VanHoey said...

So agree with calling to see if you can lower payment. Usually, if they know times are hard, they will work with you.

Robin Wilson said...

I remember my son taking out a title loan to my horror! Though he was able to pay it back in 3 weeks, he was charged over $200!! I don't think he will ever do that again and many of these loans are scary as well. But I do understand that in these tough times why ppl have no other choice sometimes.

jamie braun said...

those payday and title loans are such rip offs!

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