Quick, easy is not always best solution

WHEN YOU NEED money fast, it is tempting to look for a quick solution. Taking time to choose the best "quick and easy" solution is important. Opting for the easy way out may leave you with no way out.

The Better Business Bureau of Mississippi offers the following considerations when in a financial pinch:

1. Call your creditors. Before borrowing new money, check with credit card companies and mortgage lenders that you are already doing business with. They often offer leniency in terms, hardship programs and rate reductions.

2. Beware of quick and easy solutions. Although they can sound very tempting, don't be lured into making an expensive mistake.

Payday loans are easy way to obtain "quick cash loan" or "check cash" loans because no credit check is required. However they carry steep annual interest rates.

Car title loans use a car title and a set of keys as security. They carry steep annual interest rates and often require risky balloon payments. Inability to make the large payment can lead to loss of the vehicle.

With pawn shops, possessions are used as collateral for loans which carry interest rates exceeding 20 percent. If the loan is not repaid within the specified time period, the pawn broker can sell the possessions.

3. Borrow from a lender you can trust - a friend or relative. Treat the loan relationships with respect. Draw up and sign an agreement outlining the terms.

4. Credit card companies. Cards offering low interest rates can be deceiving since the low rates are for a limited time and then increase significantly.

5. Your employer. Some employers offer emergency cash advances to employees in need. They then deduct repayment from future paychecks

ABCs of lending

6. A is for Annual Percentage Rate. Don't select a loan based solely on the interest rate. Your minimum monthly payment should not be the deciding factor either. Look at the APR which is the total cost of the loan (the effective annual interest rate plus interest charges and one-time fees).

7. B is for behavior. You know yourself best. Be honest and consider your spending and money-management behavior. How likely are you to pay back the loan according to the terms of the agreement? Commit to build a savings.

8. C is for comparison shopping. Don't take the first loan offer. Compare the reputation of the lender, the APRs and total dollar costs. Don't hesitate to negotiate for a better deal.

9. D is for deceptive offers. Ignore "too good to be true" loan offers. Be leery of ads that "guarantee" loans to people with poor credit histories. These offers typically require you to pay a fee in advance. You will likely never see the money again nor will you receive the loan. Check out offers from unknown or out-of-state financial institutions with the Better Business Bureau or other sources.

10 E is for expert ... if things do not improve. Contact a reputable credit counselor who can help break the cycle of debt by evaluating your situation and developing a plan for financial stability.

Source:http://www.hattiesburgamerican.com/apps/pbcs.dll/article?AID=/20071207/LIFESTYLE/712070323