Feature article: Financial Information & Tips
Finding ways to fill the gap
Brenda Procter, M.S., State Specialist, & Suzi McGarvey, M.S., former Extension Associate, Personal Financial Planning, University of Missouri Extension
Consumers with a tight budget can think that high-cost lenders (like
payday loans) are their only option. However, there may be other ways
to get by. Here are a few ideas:
- Have you tried to bargain with the person or business you owe money to? Some creditors will work with you, but only if you go to them before you’re in too deep. If you offer partial payment and a timeline to pay the rest, businesses and creditors sometimes understand.
- If you already owe on a payday loan, you can request a debt repayment plan if you do it before you miss a payment.
- Some credit unions and banks are starting to offer small loans again. Have you asked around?
- Is there a family member or trusted friend that you could barter with or ask for a small loan to help you get by?
- Have you thought about having someone who trusts you co-sign for a lower-rate loan?
- Some stores offer layaway services at no or low cost. Have you considered layaway?
- Is there a social service agency, food bank, community group or church that could help you through your crisis?
- Do you have a credit card you could use and pay off when the bill comes? Even though credit cards often charge very high interest rates, the rate may be lower than what a predatory lender would charge you. If you paid off the whole credit card bill during the grace period, you would not be charged any interest at all.
- You might take on a part-time job or get some overtime hours at your current job until you get caught up. Some places need seasonal help and will work around your schedule.
- If there is no way to avoid using a high-cost lender, get the best deal you can. Have you contacted more than one lender to compare the terms?
- Go to a legitimate credit counseling service, which may be able to negotiate better deals on your behalf. Finding a legitimate credit counseling service is tricky. The National Foundation for Credit Counseling has an online locator to help you find the nearest reputable nonprofit credit counseling service in Missouri.
- Take in a roommate to help share expenses.
- What ideas do you have?
Last update: Monday, March 09, 2015