Between three and four Americans out of five are living paycheck to paycheck. Only two in five say they could cover an unexpected bill of a thousand dollars or more from their existing savings. This creates significant demand for services like online installment loans that can provide cash now. We’ll discuss the pros and cons of both installment loans and the alternatives.

Credit Cards

Credit cards are a way you can cover many surprise expenses. One problem with this approach is that you can’t use existing credit cards if you don’t have them or don’t have sufficient credit to cover the new expense. You can’t get approved for a valid credit card in time to pay for an immediately due expense like a car repair bill. It can take a week or two for the new card to arrive, and you may need money now.

If you take out a cash advance against your credit card, interest starts to accrue immediately. You may not be allowed to open a new credit card because of your poor credit. Interest rates are moderately high on credit cards, and the fees will add up if the interest and late payments exceed the credit card limit. You may not be able to roll over a credit card debt to another credit card to bring down the interest rate, either.

Payday Loans

Payday loans are loans based on your regular paycheck amount. They are in theory secured by your paycheck. However, they are actually unsecured loans. Payday loans come with a relatively high interest rate and fees, though this rivals a credit card’s interest rate if you pay off the payday loan with your next pay check. These loans are available to those with poor credit or no credit. It may be approved immediately. The risk you take with payday loans is that you may have to roll over the loan for another pay cycle if you can’t pay it off. Then the interest rate and fees are higher than what you’d pay with a credit card. Fail to budget for the loan amount, and you may be hit with overdraft fees and bounced check fees when the payday lender debits your bank account for the amount you owe them.

Another concern regarding payday loans is that the amount you can borrow is limited by state law. The maximum loan amount isn’t just a percentage of your paycheck but also set by state law. This is why you may only be able to borrow a thousand dollars though you get two thousand in your next check after taxes. Just don’t ask for more than you can afford to pay back as soon as possible.

Payday loans have the benefit of being available to young adults. All you need is a verifiable job and valid bank account. For comparison, some credit card companies may not issue a credit card without a co-signer until you’re over 21. If you’re going to ask your parents to cosign a loan, you might as well ask them for money personally. That won’t hit your credit report.

Installment Loans

Installment loans are loans intended to be paid back over time in equally sized installments, though the number of installments and how often you have to pay them depends on the loan terms. If you borrow 2,000 dollars, you may pay back 700 in four payments to cover interest and principal. The biggest benefits of installment loans are that they’re approved quickly based on your income and are available no matter what your credit is. If you have a decent paying job and over 18, you’re eligible for an installment loan. Online installment loan providers will ask for proof of your identity. Verify that the site represents a legitimate lender so you don’t get your identity stolen.

Installment loans have an interest rate that rivals credit cards as long as you pay each payment on time and in full. Most lenders allow you to pay off the loan early without consequence.

Selling Things

A common piece of advice for those in dire financial straits is to sell things to raise money. This assumes you have items that are worth selling and that they can be liquidated quickly. If you need to pay the tow truck or impound lot tonight, a garage sale isn’t really an option. Furthermore, you may not get much money for the effort. No one wants to pawn the only TV in the house or sell their wedding ring to pay medical bills. Your kids will hate you if you sell their gaming system. And when you enter places to sell these items on short notice, you’re not going to get the full value for them. You may get 400 dollars for a 1000 dollar wedding ring, and you risk never getting that precious possession back. Pawn shop loans secured by the item itself have interest rates and fees as high as payday loans, too.

Gifts and Personal Loans

This option involves asking friends and family for money. The problem is that your immediate circle may not have the money to loan or give to you. If they loan it to you, you’re now in debt to them. This can cause strife and conflict. Do you really want your mother mad at you because you can’t pay back the 500 dollars you we her?

Begging online has its own pitfalls. Do you have the time and expertise to set up a go-fund-us campaign? Do you think you’ll actually get money from friends, family and strangers for your cause? More importantly, can you get the money in time to pay your bills. Another question is whether you want to air your troubles to the world. After all, that campaign can come up in general search results and will show up in your social media feed if you’re promoting the giving campaign. 

Title Loans

There are so many horror stories with title loans that it could be its own book. You theoretically borrow money secured by just the title of the car, boat or house. In reality, it is secured by the asset itself. If you’re late paying the payment on the title loan, they can take possession of the item and sell it. This means a tow truck could show up and take your car before you’re about to leave for work. They could sell your house from out from under you, too. What about your mortgage or car loan? Whatever money the lender has left after paying off their loan may go to you, though they’re known for selling vehicles to chop shops and used car dealers that don’t pay what the item is worth. They will not leave enough money for you to pay off your loan. Now you owe what’s left of your car loan but don’t own the car anymore.