Alternatives to Payday Loans

Are you facing an emergency financial situation? Don’t take out a payday loan just yet. You may want to explore a few alternatives to help you get the money you need quick.

With the ongoing recession and financial crisis, making ends meet is getting to be harder and harder these days. Employed individuals usually succumb to taking payday loans just to tide them over until the next payday.

Quick Overview of Payday Loans

Payday loans are quick cash loans that are short-term with high interest rate. The term of payment is usually within one or two pay periods. Even though it can be a big help to employees with pressing financial problems or emergencies, it usually creates more problems. The interest rate alone is more than the actual amount borrowed. And if an employee keeps on getting payday loans, he or she will end up more indebted than before.

Other Ways to Get Cash

There are, however, alternative ways to get quick cash without having to pay high interest rate. These payday loans alternatives have better payment terms without having to pay high interest rates.

Here are some alternatives to payday loans:

  • Ask your company for an advance in salary. There are employers who allow employees to take out loans on their salary, which can be deducted from their salary in the following payday or paydays. Companies do not usually charge interest, making it easy for the employee to repay the payday advance loan.
  • Check banks or credit unions that allow employed individuals to take out small loans. Having a good credit record will definitely help you take out personal loan from your bank or credit unions. They may have longer and better payment terms plus lower interest rate.

    Credit Unions, on the other hand, are community-based, non-profit organizations. If you are a member, you can take advantage of the different benefits, such as loans, to help you with your financial need.

  • Working overtime is also a way for you to earn more income. If your company allows working overtime with pay, then you should definitely try doing this first before resorting to taking out payday loans. Or if this is not allowed in your company, you can look for a second job or a side job.
  • Another alternative to payday loans is borrowing from family or friends. Although they are your family or friend, you must repay the loan as quickly as possible. By doing so, they will not hesitate to loan you again when the need arises.
  • You can also sell personal and household items that you don’t need anymore. You can have a yard sale or sell them through online websites that allow you to post for sale items.
  • You can also cut down on your monthly bills and save money. Look into your monthly overhead and check where you can cut down.
  • If you have a savings account, you can borrow from it but ensure that you will also return the money as soon as possible. If you don’t have a savings account yet, this may be the right time to start one.