As of Feb. 1, 2019, Colorado payday lenders will no longer be allowed to charge interest rates on loans in excess of 36 percent. Voters largely approved Proposition 111 that would also eliminate the various loan fees and charges.
77 percent of state voters approved the measure that caps payday loan interest rates.
Until then, payday loan lenders can still charge more than 200 percent interest on customers’ short-term loans with some loans hitting interest rates of 500 percent or more. The average payday loan interest rate in 2016 was 126 percent with the average loan amount being $392. The average time to repay the loans was 97 days and an extra $119 in fees and interest.
People who need money quickly and can’t handle all the fees tied to payday loans do have other options they can use.
Selling Personal Items
One of the best ways to earn money is to sell things in your home that you no longer need or want. For example, you can sell clothing you no longer use, furniture that you don’t need and electronics. By selling stuff in your home, you declutter your space and give yourself the money you need without the need of a payday loan lender. You can take the items to a pawn shop, post them on Facebook or have a garage sale.
While it’s not the quickest way to get the money you need, it assures that you don’t pay interest like you would with a credit card or loan.
Boost Your Income
Find ways to boost your income. If you work as an hourly employee, consider picking up extra shifts and do some overtime. Do a side gig such as driving for Uber, babysitting, walking dogs, etc. You can even use your talents on websites such as Fiverr.com, Upwork.com and other places. This is another way to save yourself money since you don’t play any interest.
Use A Credit Card
Credit cards do not have near the risky that payday loans do with interest rates often much lower. Of course, you don’t want to max out your credit cards since this can have a negative impact on your credit score. If you need quick money, credit cards are useful. You should pay the card off as soon as you are able. Use only the amount that you need to use so you can quickly pay the card back. If you pay the card off before the bill comes out, you won’t pay anything in interest.
Get A Personal Loan
Personal loans are better than payday loans for three reasons:
- Lower interest rates
- Longer repayment terms
- Larger loan limits
However, it can take longer to be approved for a personal loan even with many lenders offering next-day funding such as Avant, Prosper, SoFi, etc. And, you also need to have a decent credit score to be approved.