Payday loans come with several benefits, there are significant disadvantages to be aware of as well. In fact, it’s even worth considering other options to meet your financial needs. What kind of alternatives are there to payday loans? Here are 10 Top Alternatives to Payday Loans, so keep reading to find out.
10 Top Alternatives to Payday Loans
1. Seek credit counseling / repair your credit
A credit counselor, community assistance program or a nonprofit can help you create a budget and a debt repayment plan to repair your credit. The main benefit to credit counseling is solving the actual issues that led you to the financial problems in the first place. You may even have enough savings right away that’ll help you avoid taking out a payday loan.
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2. Build an emergency savings account
Building an emergency savings account can be tough, especially when money is tight. But the value of that preparedness can’t be overstated. The ability to maneuver through an unexpected setback without adding debt or creating potential future hardships is worth the effort.
If you don’t have money socked away for a rainy day, start working on that today. Having to burn through your savings in the face of a crisis is painful, but substantially less painful than spending years trying to work your way out from under debt.
3. Consider an installment loan
You can typically get an installment loan quickly and at a better interest rate and longer repayment terms than a payday loan. Some lenders may even look at more than your credit score when evaluating your application. Check out the lenders in the table below for installment loan options.
“Jora Credit offers a simple, reliable way for underserved or underbanked Americans to get an installment loan when they need it most. As one of the best alternatives to payday lenders, our customers have the flexibility to repay the loan over a duration of time that makes sense for their lives and budget. With a simple and secure application process from any device, first-time customers can have $500 – $2,600 cash in their pocket as soon as the same business day.”
4. Consolidate debt
If high-interest debt is holding you back from meeting your other financial obligations, you might benefit from consolidating that debt. This means borrowing money to pay off multiple debts, then paying off that one loan. This reduces the confusion of having multiple payments and may even offer a lower monthly payment while you eliminate your debt. You could save on interest and pay off your debt faster.
Get out of a payday loan cycle by consolidating debt + other steps
5. Ask friends or family for help
It’s awkward. It’s uncomfortable. It’s something you’d probably rather avoid whenever possible. But in an emergency situation, borrowing money from friends and family is an option – and it’s entirely preferable to using a payday loan. They may be more than happy to lend a hand.
This type of loan often has the advantage of no interest.
6. Look into a credit card cash advance
Cash advances aren’t always the best option because of their high APRs, but in a pinch, the fees and terms may be better than what you can find with a payday loan. It’s often better to take the high rate for a cash advance that you can pay off over a longer term.
Avoid payday loans with the Build Card for bad credit
7. Use a traditional loan from a bank or credit union
You may be able to take out a small loan with your banking institution. Credit unions especially are known for offering loans at great rates. Furthermore, they’re often more willing to look at additional approval factors besides finances when extending loans, such as how long you’ve held your account.
8. Use traditional credit in slightly less traditional ways
Depending on the nature of your need, if what you’re looking for is quick cash, you may be able to take out a cash advance on your credit card. A cash advance is basically a small cash loan from your credit card company. It looks similar to a credit card purchase (there will likely be a cap on how much you can draw based on your credit limit) but comes with additional fees and an often larger interest rate.
Doesn’t sound that great, does it? In truth, cash advances aren’t a great idea in most circumstances. That said, if you’re in a tough situation and considering a payday loan, taking a cash advance on your credit card is a possible alternative. Neither is great, however chances are good that the advance will be slightly easier to repay.
9. Find quick ways to make extra cash
If you’re short just a bit of money, you could find a quick gig to collect some cash. Car and house sharing, selling unwanted items and market research are a few ways you can bring in money if you have extra time. The effort may pay off double-time. You won’t have to pay interest on a loan, and you could discover a new stream of consistent revenue.
10. Negotiate with your creditors
At the end of the day, your creditors want to get paid, and they may be willing to work with you to ensure that they do. Contact them and let them know that you’re having problems keeping up with your debt. They may help you create a repayment plan or extend your due date to ease your burden through financial assistance.
Find out Local funds related resources in your state
Click on your state from the list below to find local resources which may help you get free financial support, help with basic living, meeting your energy needs, buy groceries, household, food for those in need through donations to relieve some of the funds constraints.