Consumers Increasingly Turning to Loans Instead of Credit

In today’s world of high cost of living, most of us don’t have a fortune hidden under the mattress. As much as any of us would love to just pay cash for a large, unexpected expense and be done with it, that isn’t usually a practical alternative. Many people turn to credit cards, thinking there is no better option. Since the credit card is in their pocket, they think it’s the most convenient way to borrow money. Unless you plan to pay off the bill at the end of the month, nothing could be further from the truth.

Credit card interest compounds daily. If you don’t pay it off fast, this interest scheme keeps you indebted. Online loans have recently exploded as a great alternative to credit cards. Often, you can get a better interest rate and repayment terms that fit comfortably into your budget. No more struggling month after month to pay off that high-interest credit card. Many online loans also cater to customers with low credit scores. Before charging that credit card, apply for loans online.

Monthly online installment loans

As an alternative to credit cards, these loans can be great. They are especially good for high expenses that you’ll need to pay off over a longer period of time. Interest rates are often much better than credit cards. In addition, you can select a repayment period that best suits your budget.

Most monthly online installment loans require no collateral. This is important because collateralized loans could mean repossession of important items, such as furniture, a car, or your home. Another advantage is that installment loans are available for different credit and income types. Lenders offer a variety of loan programs. Some cater to customers with higher credit scores while others are designed to help those with lower scores and blemishes on their credit history.

Online cash advances

For smaller purchases, online cash advances may be a better option than using credit. These are designed as short-term loans for smaller amounts. For example, if you need a $300 loan to get an achy tooth fixed, an online cash advance could be just what the doctor ordered. You get the money right away without any hassle. Online cash advances are available to customers with great or poor credit.

Tips for being a responsible borrower

The disadvantage when you apply for loans online is the temptation to borrow more money than you really need. Though you may receive a competitive interest rate and repayment term, you still don’t want to increase your debt more than necessary. It’s always important to minimize debt and save. Here are some key tips for being a responsible borrower:

Consider what you need beforehand

Many borrowers make the mistake of applying for loans without first planning how they will spend the money. By deciding beforehand what you will use the money for, you avoid the temptation to borrow more than necessary.

Budget carefully

Never think that you can find a way to handle a payment that is too high. Remember, loan payments recur every month. Expecting yourself to squeeze money you can’t afford out of your budget every month is unrealistic. Instead, take a longer-term loan with a lower payment. If you have extra money, you can pay it off early.

Pay early

One of the best ways to go from bad credit to a great credit rating is to always pay early. By setting up auto-pay before the due date, you build an excellent payment history. It also puts you ahead of the game, which makes it easier to save.

Today’s online loan market offers many alternatives to credit cards. By tapping into these online loans, you can save money on interest and enjoy comfortable payment terms.