9 Payday Advance Loan Alternatives You Haven’t Thought Of (But Should)
While a payday advance loan is easy and fast to get, many people have a tough time repaying them. The reason for this is that the type of loan becomes due much faster than most borrowers expect, resulting in the person taking out another loan to cover the first. This may happen multiple times, and when it does, a borrower winds up owing more in fees and interest to payday advance lenders than he or she borrowed initially. If you need money right away, consider payday advance alternatives that you may not have thought of.
Nine Payday Advance Loan Alternatives You May Not Have Considered
Payday advance loan alternatives range from asking for more time to pay a bill to requesting a small loan from a credit union or bank. If you have a checking account, then overdraft protection may be a way to obtain the extra funds. Requesting a bad credit personal loan are other alternatives. Even if you have bad credit, there are lenders who will issue credit to you as long as your payment history and income are solid.
Some nonprofit organizations and community centers lend money to people who are struggling with a financial emergency. You can also look for ways to make some extra cash fast. Focusing on your savings is another way to avoid borrowing money from advance payday lenders, one that may keep you from accumulating a high level of debt.
Ask for More Time to Make a Payment
The Fresno Bee reports that asking for more time to make past due payments is an alternative to seeking assistance from pay day advance lenders. If you’re struggling to make a payment, then contact your lenders as soon as possible to work out a payment plan that you can handle. If your lender believes that you are acting in good faith, then they may give you more time to pay without charging you a late fee.
Request a Small Dollar Loan from a Credit Union or a Bank
When it comes to poor credit financing, some traditional financial institutions offer short-term loans for small dollar amounts. These types of loans frequently come with competitive interest rates. If you have a credit card, then you may be able to withdraw cash from your available credit. Keep in mind that this type of transaction typically comes with a higher interest rate. Some credit card companies even charge a fee for the convenience.
Consider Using Your Checking Account’s Overdraft Protection
If you use most of the funds in your checking account regularly and make an accounting mistake, then overdraft protection can protect you from bounced checks and fees. It can also cover a financial emergency. Ask your bank if this is an available option with your checking account. Before using your overdraft, research the terms of the protection. Make sure that you know what it will cost and how it will protect you. Some banks only provide bounce protection. This covers purchases that you make, but the fees for it could be high.
Request a Credit Card from a Trusted Bank
Requesting a credit card from a bank that you trust is another online payday advance alternative. If your request is granted, then the credit card issuer will set up a credit limit that you can use to cover financial emergencies.
Put in for a Personal Loan
According to The Simple Dollar, putting in for a personal loan is a good payday loan alternative. Personal loans usually have longer repayment terms than payday loans. Also, you’ll generally pay the money back in installment amounts, making this type of loan more affordable. Before accepting a personal loan, confirm the interest rate for borrowing the funds and whether there’s a fee for doing so.
Ask for a Small Loan from a Nonprofit Organization
Instead of seeking assistance from an online payday advance, ask for a small loan from a nonprofit organization. Today, there are a number of nonprofits that provide money to people who need help paying their rent, utilities or a car repair bill. These organizations may only lend money to you if you’re struggling to cover the necessities.
See About Poor Credit Financing from a Local Community Center
NerdWallet reports that poor credit financing may be available through a local community center. Like nonprofit organizations, community centers often help local residents get by when financial emergencies arise. If you qualify for this type of loan, then you’ll be able to avoid entering into a debt cycle that can take years to repay. Payday loans are infamous for causing people to stay in debt longer than they intend.
Look for Ways to Make Extra Cash Fast
When cash is short, consider ways that you can earn a little extra cash fast. This may include renting out a room of your residence, driving for a car service company temporarily or selling items that you no longer need or use. If time permits, you could also take on a second job for a short period. Keep working at it until you’ve created some breathing room in your finances. Taking this step could be a major bonus since you may discover a new way to increase your income permanently.
Focus on Your Savings to Avoid Future Financial Problems
Instead of turning to poor credit financing, focus on building your savings. To do so, create a budget that you can stick to. Be sure to eliminate any unnecessary purchases. This may include doing away with things like buying a cup of coffee or spending money in vending machines for snacks. Take the money that you’re saving and deposit it. Small savings deposits add up, and they tend to add up quicker than you’d expect. When you have a savings plan, you may be able to avoid borrowing during financial emergencies. If you don’t have to pay a fee to paycheck advance lenders, then you can start getting ahead.
Be Creative to Come Up with Other Alternates Besides Payday Advance Loans.
While there are many payday advance loan alternatives, you may need your creativity to come up with a different way of getting the extra money that you need. Saving for a rainy day is the ideal choice when it comes to avoiding payday loans, but if you haven’t been able to take this step, then alternative borrowing options exist. To learn more about other ways to get your hands on the emergency cash you need, visit the Personal Money Store.