payday loans - Are the alternatives competitive?

North Carolina, noting that the majority of loan companies were in violation of state usury laws, took action by just shutting the payday loan industry down. The state of North Carolina just recently clamped down on cash advance loan stores, effectively putting them out of business. For many individuals who have been applying for such short term financing, a state just closing an industry may come as a shock.

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There are other lending choices out there for consumers who need money, and a few of them are better choices than the four hundred percent annual interest rate loans charged by these payday loan stores. For individuals who cannot, or do not wish to, transact with cash advance loan stores, there are other choices.

Here are some alternatives to payday loans and their general cost when stated as a yearly interest rate:

• Credit card bill paid late. You should be aware that paying late on your bank card bill will also trigger the "default" rate of interest, which could cause the rate applied to your credit card account from here on to be as high as 30%. Late payment on your credit card is not a good alternative to a payday loan, as there are long term consequences. The costs for paying your credit card bill late can amount to $15-30, which would amount to a 200-400% rate, perhaps cheaper than a payday loan.

• Bank or credit union bad check fee. Many, if not most, banks and credit unions now provide overdraft protection, where the financial institution will honor a bad check for amounts of up to a certain limit. Quite a few banks still allow no overdrafts. Formerly, writing a personal check for more cash than you had in your bank account would trigger a bounced check and fees from both your bank and the business to whom you gave the personal check. Recent overdraft coverage comes with a fee, which amounts to $25-30 for each and every check. The price charged for overdrafts is not actually a fee, as it is intended to be a penalty, but if you need to do it and you are willing to pay the amount, than it works as a benefit. For a $200 overdrawn check, the fee would amount to a rate of interest of about 350%, which is comparable to that of a quick cash loan.
• Short term loans from credit unions. A number of small credit unions are now introducing short term, small amount lending for their members. Interest rates for short-term credit union loans often run less than 20% per year, making this option a bargain if it is available. It would be well worth your effort to talk to your nearby credit union to see if they can help you out with a minor loan.
• A loan from your boss. Asking for such an advance on a paycheck often would likely be a bad idea. Not all companies are willing to give their workers an advance on a paycheck, but a few may, and it's usually worth taking the time to ask. In all likelihood, such a payday advance would have a cost of nearly zero, making it a wise choice.

Before you apply for an expensive source of funds, look around to see if you can find a better deal. There are alternative choices available that might be better for your needs than cash advance loans. Quick cash loans are occasionally good for short term, emergency cash.