For families that want the flexibility of cash, but who cannot scrape up the cash to make payments, personal loans may be a good option. Families that take up this plan may be able to get a cash discount from the provider, but they may have to pay interest rates in order to pay the loan back.
When people think about quick loans for a sudden expense, they often think about so-called payday loan providers that set up shop in strip malls and offer credit to almost anyone who walks through the doors. The Pew Charitable Trusts suggests that usage rates in some states are as high as 13 percent, which means that a lot of people take advantage of these types of loans, but they can come with some deep drawbacks.
Most payday loans come with very high fees, and they may also come with incredibly steep interest rates. A person taking a loan like this may end up shouldering a great deal of debt in no time, and as the costs pile up, paying the loan back can be hard.
Thankfully, no one is advocating the use of payday loans for rehab. After all, treatment providers want to reduce the stress a family feels, not augment it. As a result, many treatment providers have relationships with banks and credit unions that can offer loans to people in need without the very high fees associated with a payday loan.
In an analysis of these small, personal loans, NerdWallet found even the most expensive private lender ended up costing borrowers less than typical payday loan providers. Even people with poor or missing credit histories could get these loans, the reporters found. So there is no need for a family to head to a payday loan provider for help. A private lender may be able to do a better job.
These are debts, and families will need to pay them back with interest, so they are not a form of free money for addiction care. Keeping those overall costs in mind is wise.