Alternatives to Payday Loans

You are looking for an alternative to a payday loan. Instead of rushing to lock into a cash advance at a near usurious rate, consider these other options. You can solicit a cash advance from your boss or even from a relative to cover immediate expenses. Thus, instead of using payday loan funds to pay back a medical bill, take care of an angry creditor, or buy back your car from a repair shop or towing agency, you can simply earn slightly less money in the weeks or months to come.

Alternatively, you can apply for a standard loan instead of a payday loan and use the proceeds to cover late fees, finance charges, and other accumulated debts. After all, even a quickly paid off payday loan can strip you off significant cash, on a $400 payday loan, for instance, you might have to pay a use charge of $50 for a two-week period. On the other hand, if you negotiate with your creditors or even accept a late payment fee as the price of doing business, you may be better off in the short term.

You can also lean on your bank account's overdraft protection to take care of a pressing, unavoidable financial conflict. Sure, you may have to remunerate your bank to the tune of $75 or a $100 (you can easily check out overdraft charges on your bank's website). However, a steep one time penalty from your bank might beat the inconvenience of payday loan fees, particularly if you're not financially well organized, it's often better to reduce the number of debt exposures.

Don't forget that some creditors may allow you to negotiate terms. Perhaps you can amortize your debt over an extended period, or perhaps you could agree to a higher interest rate in exchange for more time on a loan. In addition, you might siphon money from your savings account or from other stored assets to deal with your urgent financial needs.

Finally, if you are below your credit limit, budget out the finance fees associated with putting your debt onto a credit card, even a high interest card. After all, the terms and conditions associated with even the most lenient payday loans are often worse for borrowers than the terms associated with high interest credit cards.