Opponents of personal loan company tend to argue that there are cheaper pay day loan alternatives accessible. Their argument may apply to consumers with sufficient credit to grant the financial flexibility needed to get cheaper short term loans, but for consumers operating under great credit constraints, money lender is a a lot more practical option. You wouldn't know this if you believed mainstream media claptrap, however; USA Today's recent article is a perfect example of the common misinformation. The newspaper's musings are something a lot more than cheap.

Article Source: USA Today payday loans no fax alternatives article is misleading

401(k) loans aren't good payday loan alternatives

Consumers who are serious about pay day alternatives like 401(k) loans should realize that there can be dire consequences. True, it is possible to borrow up to $ 50,000 or half of what's as part of your 401(k) plan (whichever is the lesser) at an initially low rate of interest with no credit check. For instance, you've to pay it all back before growth can occur, writes The Money Alert. Your retirement savings (a lot more vital today than ever, considering the recessionary economy) can take a big hit. And don't forget that employer matching shuts down when you are repaying.

Here's something else you'll lose: take home pay via payroll deduction. Great, but if job loss hits, you are in trouble. Then you'll only have 60 days to pay anything back or the 401(k) loan can be considered an early withdrawal. Think penalties and the possibility of being thrown into a higher tax bracket once you report the amount of the withdrawal penalty as taxable income on your next tax return. That'll cost you. Instead, pay day loans can be a more proven inexpensive choice, as outlined by a recent joint University of Michigan/Federal Reserve study. They're much a lot more practical for small-scale loans, too.

Credit card cash advances: Also a bad idea?

USA Today strikes out again with this effort at exposing payday loan alternatives. Credit card cash now via special blank checks is convenient, but also quite messy. The cash loan APR is always more than the APR for regular credit card transactions. Then if you have to use your credit card for a cash till payday at an ATM, you are able to expect to be charged even more. This is why reading the terms and conditions of your credit card is a good idea, writes Young Money. If you need money and want payday loans no faxing alternatives, try using an installment loans for bad credit instead. It won't put you in a situation where you've to pay down a cash until payday loan after the rest of the credit card charges are paid.

Bank and credit union small loans

Credit history is important here. According to USA Today, bank and credit union small loans are great if you have the credit for them – but numerous people don't meet the standards. Payday loans, on the other hand, are easier to qualify for and enable some consumers to repair credit. USA Today doesn't tell us this, but payday loans are the real choice for credit-constrained consumers.

Additional information at these websites

USA Today

usatoday.com/money/perfi/columnist/block/2010-06-15-yourmoney15_ST_N.htm

The Money Alert

themoneyalert.com/401kloan.html

Young Money

youngmoney.com/credit_basics/040216_01/