All you need is a little cash to hold you over until you get your next San Diego paycheck. Maybe you’ve had an unexpected expense, like a dentist bill or a car problem, and you simply don’t have the cash you need to get through the month. The strip mall on the corner advertises San Diego “payday loans” in flashing neon. That sounds like a good idea, right?
San Diego payday loans are short-term, unsecured loans that are meant to be repaid at the borrower’s next payday. The lender usually verifies the borrower’s identity, and requires a San Diego bank statement or pay stub to confirm employment and income. The borrower then writes a postdated check for the full amount of the San Diego personal loan, plus loan fees, and when the loan is due, the borrower either pays in person or the lender cashes the check. That sounds like a simple enough solution to your short term cash flow problem, but anything that sounds too good to be true probably is.
San Diego Payday Loan Problems
The problem with San Diego payday loans begins to unfold when the loan comes due but you can’t pay the full amount back. If your bank account doesn’t have the required funds and the check bounces, not only will you incur additional fees from the San Diego payday lender, but you’ll face a bounced check fee from your bank as well. Many who face this scenario simply ‘roll over’ the debt, and take out another San Diego payday loan, incurring yet another fee. This cycle can repeat itself again and again, and sometimes cascades into a mountain of debt.
San Diego Payday Loan Interest
Interest rates can be exorbitant with San Diego payday loans. One San Diego payday lender charges $27.70 for a $200 seven day loan. That makes the effective annual percentage rate a truly shocking 722.18%. Even a small San Diego payday loan can end up taking months, even years to pay off, and cost thousands of dollars.
San Diego payday loans are certainly not a bargain. One simple solution to a short term cash flow problem is to take out a collateral loan from Diamond Estate Jewelry Buyers. We have helped thousands of San Diego residents with personal loans secured with luxury collateral such as high-brand watches or diamond jewelry (minimum cash loan amount is $2,500). But there are other ways to manage a short term cash flow problem, and we’ll detail a few of them in this article, as well as some ways to avoid the problem altogether.
Avoid San Diego Payday Loans with Payment Plans
Perhaps the best alternative to taking out a San Diego payday loan is to deal with your creditors directly. If you know you won’t be able to make a payment, call your creditor before the due date to let them know in advance of your situation. They may extend your due date without charging a late fee or reporting you to the credit bureau.
Many San Diego creditors will negotiate partial payments if you have a reasonable and consistent payment plan in place. Your creditors ultimately want you to pay your debt, and if you are only incurring more debt by taking out San Diego payday loans, they are less likely to see their debt paid in full. Working out a payment plan can reduce your debt, your interest rate, and may allow you to pay off your bills over a longer period of time.
San Diego payment programs with credit card companies can be difficult to negotiate, and can affect both your credit score and your taxes. So be sure to get all the terms of any settlement in writing, and make sure you understand the tax implications. Any debt that is relieved is considered by the IRS as income, and as such is taxable.
Employer Advances to Avoid San Diego Payday Loans
Some San Diego employers will grant cash advances to their employees. These advances are not loans, but true advances, and as such have no interest rate or credit implications. Check with your human resources representative to see if your San Diego company has a policy for extending advances, and then make an appointment with your boss to discuss your situation in private. Be sure to state your case succinctly, and plan ahead for the fact that your next San Diego paycheck will be short the amount of the advance unless you have set up a longer repayment plan. You will want to be sure this is a ‘one time only’ request.
Using Credit Union Loans to Avoid Payday Loans
California credit unions provide many of the same services banks offer, but are member owned, non-profit entities. Because of this, San Diego credit unions are more likely to take a personal approach to lending, rather than simply running your credit score through an automated system. And many San Diego credit unions offer small, short-term loans to their members. Loans of this type can easily function as an alternative to a payday loan, with interest rates as much as 30 times cheaper than a typical San Diego payday loan.
Cash Advances to Avoid San Diego Payday Loans
While cash advances on a credit card might seem like a bad idea, they can be better than falling prey to the harsh terms of a San Diego payday loan. Even though cash advances on credit cards can feature interest rates as high as 30 percent, they are still much cheaper than a payday loan in San Diego. Some credit card companies specialize in providing credit to customers with poor credit histories. Be sure to shop around and find a card with the lowest annual percentage rate.
Borrowing from Friends to Avoid Payday Loans
Borrowing money from a friend or family member is always a tricky proposition. Even when all parties agree to the arrangement, there’s always the possibility that the relationship will suffer if you’re not able to pay back the San Diego loan in a timely fashion. If you do decide to borrow from friends or family, consider writing up an agreement detailing the terms of the loan, including the date you intend to pay back the loan. You should be as serious about paying back your friends and family as you would be paying back any San Diego bank or business lender.
If you are seeking a person loan of $2,500 or higher, visit Diamond Estate Jewelry Buyers to learn more about their collateral loan alternatives to San Diego payday loans: California Collateral Loans.
Are you thinking about finally repairing that leaky roof in your home? Check out our article: How to Finance a New Roof in San Diego.