Payday Loan Alternatives
If you have an emergency need for extra cash, let's make sure we get you the most favorable loan terms.
Having to borrow money sucks. There’s no other way to say it. You may have caught my recent article where I talk about how I am completely debt free and I have tried my whole life to avoid debt like it’s Monkey Pox. That's what inspired me to write this piece about payday loan alternatives.
Sometimes life happens. Most people are going to need to take out a mortgage if they want to own a home. A lot of people need to take out a car loan to purchase a new vehicle. Sometimes folks don’t have enough money to cover necessities and they have to take out a loan.
While you should avoid debt if you can, there’s no use in feeling shame if you do have to borrow some money to make ends meet. You should however try to focus on taking out a loan that has the most favorable terms for your situation. You should obviously shoot for a loan with a low interest rate and low (if any) associated fees.
For people who aren’t very experienced when it comes to personal finance, you might think that a payday loan is a good option to borrow a few bucks ahead of your next paycheck. The reality of the situation is that payday loans have high interest rates that don’t make sense for the majority of borrowers. Unless you have a really poor credit history, there is a high likelihood that you’ll be able to find more favorable loan terms.
Let’s take a look at some of the other options available.
Bank or Credit Union
One of the best payday loan alternatives is a personal loan from a bank or credit union.
First, check-in with the bank that you have your checking account with and see if they have personal loan options available. These loans typically have lower interest rates than payday loans, and they can be used for a variety of purposes.
Don't be afraid to shop around with other banks and credit unions, but start with the bank you have a history with, as they might be more likely to give you favorable loan terms.
Another option is to get a cash advance on your credit card. This can be a good option if you have a high limit and a low-interest rate.
However, it's important to understand that cash advances typically have higher interest rates than purchases, so you'll want to be sure that you can pay it back quickly. In addition, many credit cards charge a fee for cash advances, so be sure to check the terms of your card before you use this option.
Charities and Nonprofits
I’m going to assume that you’ve already exhausted all your resources like asking friends and family for a bridge loan to get you through your tough time.
However, there are other options like local charities, nonprofits, and even church groups in some instances depending on your circumstances. Make sure that you research these options before signing up for a loan.
Assistance with Medical Bills
If the reason you’re looking for a loan is to help with medical care, you should know that you have options. In some cases you may be able to work with your doctor’s office in order to setup a repayment plan. Inquire with the medical practice’s billing department or office manager to see if there any options for you.
Additionally, you may be able to use a medical credit card like Care Credit which may feature a lower interest rate—and even potentially a 0% interest rate for an introductory promotional period.
What if I still need a payday loan?
If you've read through all our alternatives and don't qualify, but you still need emergency access to funds, then you need to make sure that you're getting the best terms available.
You can check out our list of the best payday lenders online and learn more about the borrowing process.
A Final Word on Payday Loan Alternatives
Before you decide to take out a payday loan, be sure to consider all of your options. Payday loans can be expensive, so you want to make sure that you are getting the best deal possible. Take some time to research your options and find the one that is right for you.