Staying Away From Alternative Financial Services
Posted at by ifydcat on category Personal FinanceThere has been a huge wave of alternative financial services feeding off of the sub-prime lending market in the last couple of decades. These services prey on people with poor credit to get the items they need financed or the money they need to pay bills. These arrangements are just ravaged with pitfalls and shady business. Continue reading to find out helpful tips that you need to know.
People use alternative financial services because they are available to them and legal. While legal, they offer services to people with the understanding that the help they are offering isn’t really help at all. The interest rates on loans offered are just outrageous. The people using these services are are hurting financially and need the help. Is it possible to get out of a bad situation by creating another one? No! People argue that these services are needed, but the people that are using them are trying to fix a bad situation with an even worse situation.
Payday loans are a major source of pain for people that have less than perfect credit. At times of distress, when other options should be the rescue plan, payday loans step in as an easy convenience. The only problem is that later on, the payday loans really stick it to the consumer. These types of loans should be avoided at all cost.
Make sure you don’t use a rent-to-own program. You want to bust your budget? You’re never going to pay things down and have a budget that you can handle if you keep taking on items like this. If you can’t afford the new furniture outright or on 0 percent financing, then work your way to where you can. Don’t pay for something by the week that carries a huge interest rate. They want to charge you 20 bucks a week for something, and after taxes and fees, that takes 100 bucks a month out of your budget. That is if you buy one little thing!
Stay away from auto title loans because these are a source of major distress. They carry the same high interest rates, and the more you borrow, the more trouble you are going to be in. While these loans are backed by your car, the same reason that seems to negate the problem actually becomes the problem. People have no choice but to let their car go if they can’t take care of the loan. No matter the determination, taking the loan was enough to doom them. The interest rate and terms are so ugly that there is nothing much the person can do to keep their car.
Alternative financial services have found a place in society, but they haven’t found a very good one. You can be easily stripped of your financial freedom, and it is hard to get it back coming out of those waters. These companies are downright dangerous, and they should be avoided at all cost. Make sure you remember the helpful tips you’ve just read as you continue to battle your personal finances without contacting one of these companies.