Surveys have shown that a majority of Americans, 60% to 70% live paycheck to paycheck. There are always going to be hiccups in your personal finances, and those tough times are often multiplied if you do not have a written monthly budget. But, how do you find money to pay your bills in short notice if you are in a pinch?
Going to a payday lender should be one of your last resorts because of the enormous amount of interest that you will ultimately pay on such a short-term loan. Payday lenders provide a horrible service that preys on people who are struggling and allow you to roll short-term loans over with interest continuing to build and build. But, you do have other options if you need money in a pinch to pay your bills.
Where To Find Money In A Pinch When Times Are Tough
Here are a few examples of where to go…
Visit Your Local Pawn Shop
I am a huge fan of pawn shops, and it is a shame that they often receive a negative connotation from the general public. Pawn shops are actually one of the most highly regulated businesses in America.
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A pawn shop can provide you with a micro loan against something of value that you bring into the pawn shop. You have the choice of selling your item outright, or you can pawn in and receive a loan for your item.
Depending on the state that you live in, you typically get 90 days to come back and repay your loan plus interest and recover your item that you pawned. If you do not pick up your item, the pawn shop is free to sell it in their store or on the internet on sites like eBay or Half.com.
According to the industry trade group, the National Pawnbrokers Association, pawn shop customers borrow an average of $80 against their items and 80% of the loans are repaid and the collateral is reclaimed by the owner.
Peer To Peer Loans With Lending Club Help Skip The Bank
I am a huge fan of peer to peer lending. I personally invest and lend money to others using Lending Club, and I love their service.
So, what is peer to peer lending? That is where you as an individual get to be the bank and invest money by lending it directly to other people.
Lending Club and other peer to peer lending services such as Prosper and Kiva simply provide the forum for borrowers to meet lenders and facilitate the transactions. So, if you are in a pinch and need money, you should definitely consider peer to peer lending.
At Lending Club, you can borrow money and repay your loans over three or five years. The rates for loans are based on your credit score and other factors, but they are often better interest rates than you would receive by using a credit card.
And, for investors who lend the money, the rate of return for even the safest of loans creams the current nonexistent rates of a savings account, money market funds, or even certificates of deposit.
Check Out Bill Float
Last weekend, I had the pleasure of meeting one of the founders of BillFloat. BillFloat is an interesting company that is offering customers more time to pay on some of your monthly bills when you run into financial trouble.
BillFloat has agreements with companies that you do business with every month, and their service is a way that you can get more time to pay your bills to more than 2,500 retail outlets such as your cell phone, landline phone, cable service, electric and water utilities, and insurance providers.
BillFloat can provide you with a 30 day loan that is sent directly to your cable or phone company for you. Unlike payday lenders which will continually let you roll your loan over each month increasing the interest you ultimately pay exponentially, BillFloat does not roll your loan. It is simply due within 30 days.
You can find BillFloat built right into most of the leading companies you receive bills from as a payment option if needed. It is definitely a great idea and great choice to help you stay current and keep your utilities on if you are in financial trouble.
There are many ways that you can find money in a pinch instead of having to become a victim of excessive interest rates charged by payday lenders or bank overdraft fees. Payday loans have the equivalent of a 456% annual interest rate if the two-week loan that they offer is annualize and rolled over week after week for a year.
Pawn shops, peer to peer lending, and services like BillFloat are just a few examples of how to find money in a pinch if you run into trouble paying your bills at the end of the month.
Do you have any other ways that you find money in a pinch? Let me know in the comment section below.
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