Loans to assist with utility bills.

While it should be the last choice, and only looked into after all financial assistance programs, government aid, charities, and other options have been explored, there may be times when a short term loan may be the best option to pay an outstanding utility bill. It may be better to borrow money in some cases than have your power shut off.

There are several short term options that people can look into get help with paying utility bills. They include low interest salary advance loans from a credit union, payday loans, borrowing from a military assistance program, and low interest peer to peer loans. Find out about all these options.

Types of loan programs for paying utilities

Credit Union Salary Advance Loans
These are relatively new loan options and they may be your best option for paying a short term utility bill in an emergency. The loans are usually less than $1000. But the cash can come in handy. Salary Advance Loans are offered by most Credit Unions, and they are a much cheaper alternative than relatively high costs of payday lenders. A salary advance loan can have an interest rate of around 10%, even less than many credit cards.

Social and Peer to Peer lending.
Another great option to receive assistance for paying bills. This is a loan that is received from regular everyday people like you and me ("peers") and it does not involve the participation of a bank, payday lender, or other financial institution. Peer to peer loans also have interest rates that are lower than a payday lender or bank.

 

 

 

Payday loan.
These are small, short term loans (usually less than $1,000) and they can be used by people with poor credit, and they do not require a background or credit check be completed. Payday advance loans have very short repayment terms and they must usually be paid back within a couple pay periods or several days. If not repaid then, they can be very costly.

Payday advance loans are often used by people behind on bills, including utilities, to help them pay their bill until their next paycheck is received. Payday loans offer people an easy and very quick way to get emergency assistance when they have no other options. The money can help with paying utility bills.

Other short term loan alternatives:

• Ask a relative, friend or someone else to loan you money for your utility bill
• Try to negotiate a payment plan with your utility company
• Charge your utility bill to your credit or debit card
• Ask for a payroll advance from your employer

Pros and cons of borrowing to pay utility bills

Pros of a loan.
If you decide to take out a short term loan they can be an effective way to rapidly and easily get needed cash during an emergency to assist with paying utility bills if you have no other options. The money can prevent a disconnection. In particular, payday loans are very helpful for individuals who do not have savings readily available or credit cards. Because many of the loans, such as payday loans do not require a credit check or available for people with poor credit, they are easy for people to obtain.

 

 

Cons of a loan.
It is very important that you repay the loan, and in particular a payday loan as it has higher interest, as soon as possible. Some people who use these loans to pay utility bills may get into trouble if they do not immediately repay the funds. If you can’t repay the lender at the end of the term, you may be charged additional fees or interest. It is almost always better to pay an outstanding utility bill with your savings or a credit card before turning to a short term loan. However, you should always explore all options.