Best Alternatives to Payday Loans

Loan

Let’s accept the fact that borrowing money from an unauthorized lender is not the most ethical way to do business. Lending money is a business and someone who doesn’t follow proper ethics can never become a good partner. Payday loans are short-term cash loans offered by keeping your bank account details as collateral. Lender’s ability to recover the borrowed money has made payday loans work until now.

In some cases, a lender also demands a post-dated check of a sum of borrowed money, interest and finance charges. If you fail to pay up in time, the lender will either encash the check or withdraw money using your bank credentials. This is highly risky. It is imperative to remember the alternatives to payday loans as you don’t know when you will need emergency funding.

Here are the best alternatives to payday loans.

1. Apply for an Unsecured Personal Loan

Unsecured personal loans might seem risky for the lender but for you, they are the best alternative to a payday loan. You don’t need to put your house on the line to borrow money from a personal loan lender.

Usually, the lender’s trust people with a stable job, belonging to a good family, a decent career, decent social status, etc. Having these qualities make borrowing money a piece of cake. Lastly, you also don’t have to worry about credit history to get a personal loan.

2. Borrow money from family or friends

Borrowing money from family members and close friends is an age-old way of getting yourself out of a jam. There is nothing wrong with asking for money to your family members or friends. Just make sure you give a good reason. Asking for money from your friend to buy the new watch or an iPhone is not considered ethical. You will destroy your friendship as you are taking someone for granted and using them to fulfill your cravings.

3. Use your Credit Card

It is possible to borrow money from your credit card. You heard it right. And I am not talking about using your credit card to purchase stuff. You can swipe your credit card at any nearest ATM to withdraw cash. Bear in mind that this service is only supposed to be used in emergencies. Especially in times when you don’t have any cash in your bank account, you lost your debit card and need urgent cash, etc. The interest rates on cash withdrawn using your credit card is a bit high.

4. Borrow money from a credit union

Credit unions are non-profit organizations where members offer to help one another. The interest rates on loans are also quite low(approximately 3 percent).

Moreover, the Prudential Regulatory Authority and the Financial Conduct Authority are responsible to regulate these credit unions. So, whenever you are need of some cash, find a credit union present in your region/church/apartment building/condominium and reap its benefits.

Summary

So, next time you are in an emergency and need of some cash, think about the following alternatives:

1. Apply for an Unsecured Personal Loan

2. Borrow money from family or friends

3. Use your Credit Card

4. Borrow money from a credit union

These are far better than a payday loan. A payday loan does not let you repay on your terms. Plus, you have to pay back a lump sum amount which includes interest and finance charges.

Does Home Contents Insurance Cover Mobile Phones?

content insurance

Mobile phone insurance might seem silly to most people. We live in a throwaway culture where any item under $1000 is replaced without giving a single thought. But someone who has lost their phone just within a few days of purchasing will know why it is so important to have your home contents insurance cover mobile phones too.

Losing your new phone hurts a lot. Especially, when you still have to pay EMIs for the next six months or a year. Imagine paying for something that you don’t even own anymore. No one wants to be in such an infuriating situation. This is why most people want their home contents insurance to also cover stuff like mobile phones.

What is home contents insurance and what does it usually cover?

Home contents insurance provides cover for the items that are inside your home. Damage to the household items due to a natural calamity, theft, or vandalism is usually a good reason to claim your insurance from your home content insurance company.

For people staying in a rented home, the renter’s insurance policy includes home content coverage under it. Renter’s insurance can either be purchased by the landlord or the tenant. This depends on the terms and conditions the two parties agree upon before signing the home agreement documents.

Now the most important question. What does a home contents insurance cover? A home content insurance covers the valuable items in your house like furniture, electronic(including your mobile phone), jewelry, pets, livestock, ammunitions, etc. So basically every item in your home that is subjected to damage during an untimely event.

What if a guest/roommate/family member loses or damages their mobile phone in my property? Will the home contents insurance cover them too?

A home contents insurance only covers people who live the house and are listed in the policy. For instance, if you are a married person, it is obvious that you will list your spouse and children’s names in the policy but a guest or a roommate living temporarily in your home won’t be able to reap the benefits of your home contents insurance.

If a friend or a distant relative wants to stay in your home for a long term and also desires to get their mobile phone insured, you will have to contact your home insurance/renter’s insurance company and get them on the policies list. Your monthly premiums will get affected, as there is one more member the insurance company has to take care of, now.

Summary

Home contents insurance cover is usually up to a certain fixed amount. For basic household items like TV, air conditioner, furniture, etc a fixed amount is set by the insurance company and losses beyond that amount won’t be covered.

For a mobile phone, the fixed coverage is more than enough unless you are planning to buy iPhone Princess Plus which costs roughly $176,400. In this case, you will have to purchase insurance for the actual contents of your home by submitting a list of the expensive items you posses.