Payday loans are available 24 hours a day, 7 days a week. If you have computer access, you can apply anywhere, any time. They are the go-to loan for people who have bad credit or no credit at all. That doesn’t mean there aren’t alternatives.
If you are in dire need of financial help, but don’t want (or can’t access) a payday lender, what are your options? Well, there are actually many alternatives available to you! Some are good, others not so good. That is for you to decide.
Alternatives to Payday Loans:
Stick with your Regular Bank
If you have money tucked away in retirement accounts or savings accounts, check on your options for accessing this money. No savings? You’re not alone a huge percentage of people no longer have savings accounts! A sign of the times. Maybe your bank can protect your finances temporarily with overdraft protection. (but be cautious, the APR on overdraft is often higher than a payday loan!)
What if your bank can’t help?
Credit cards often have steep interest and fees, but still end up being cheaper in the long run than loans. By using a cash advance on your credit (or just charging what you need to the card) you can buy yourself a little time to get your finances straightened out. If you do, try and have an “exit strategy” so you can pay off that balance quickly. Or it could cost you.
What if you have bad credit, and can’t get a credit card?
Deal Directly with Creditor
In the days before smart phones and emails, people used to talk to each other. Try going “old school” and talking with your creditor! Ask if they can set up a payment plan for you, or give you an extension on your due date. Will they work with you? It’s impossible to say, but the worst thing that could happen is they say no. So what’s the harm in trying?
What can you try if the creditor won’t work with you?
It’s often easier to apply for a loan than to go to a friend or relative and ask to borrow money. But maybe that’s just what you should try. If you pursue this route, be respectful and professional, and establish a repayment date with the person. Also, you might try talking to your boss or place of employment and ask if they can give you an advance on future pay.
What if no one can help you out?
If nothing else has worked, you may be in a position where taking out a loan is your only option. But there are still a few different ways to proceed.
You might apply for a traditional bank loan. Either a personal loan, or a line of credit from a credit union. Make sure to use an FDIC approved lender.
Or try other alternative banking solutions. If you own a car, taking out a title loan may be your best options. Or look into installment lenders. Much like payday lenders, installment loans are available to people with bad credit. But they have longer repayment periods and lower APR than payday loans.
Did we miss any? If you have your own alternatives for those who need a financial boost, please comment on this blog and share your wisdom!