What are the Alternatives to Payday Loans?

Payday loans are great if you are a responsible consumer who only borrows what you need and commits to on-time repayment. However, if you think you cannot pay on time then you might want to delay borrowing for now. Or you might also want to consider cheaper alternatives to avoid costly consequences. In fact, it is highly recommended to check alternatives first before deciding if a payday loan is right for you.

Some of the ideal alternatives to payday loans are the following:

Family and Friends

If you only need 100 or 200, the best option to look into is to borrow from family or friends. Since the amount is small, chances are you're going to get lucky and get the money at little to no interest at all. Plus you don't have to worry about racking up extra interest and fees when you miss paying the loan on time.

Cash Advance from Employer

If you're employed with a steady income, you can ask your employer for a cash advance instead of doing it through a payday loan. Explaining your situation with your employer will most likely result to a loan with a lower interest. Since your employer holds your paycheck, the risks are lower thus greater likelihood for you to get a cash advance.

Credit Card Cash Advance

Another option to consider if you need quick cash fast is to get a cash advance on your credit card. If you look around a little, you'll find out that there are some companies who specialize in providing cash advances for people with poor credit rating. This type of cash advance is also way cheaper than payday loans with APR at only 30%. Hit up creditcards.com if you're considering a cash advance from your credit card as your best option.

Credit Union Loans

If you're a member of a credit union, take advantage of that and apply for a credit union loan. Most credit unions offer short-term loans to its members up to 500 or more per month. Repayment can be done over month or a few months and it is automatically deducted from your bank account. Most credit unions also deduct 5% of the loan and set it aside in a savings account as an emergency fund.

Peer-to-Peer Lending

Borrowing through peer-to-peer lending is another great way to raise funds fast. This kind of transaction is usually done online where unrelated individuals with capital lend money to other individuals who need it. This option is cheaper than payday loans because there are no middlemen involved. You borrower directly from a willing peer and pay off the loan directly to that person as well.

Small Consumer Loans

If the above choices do not pull through for you, one more place to try is small consumer finance companies. These companies offer small loans for short term with APR at around 60%. Just like payday loans, you can borrow from 100 up to 1,000 and pay it off over one year. With lower APR involved, you'll definitely be paying less than what payday loans would have cost you.