What are the Top 5 Alternatives to Payday Loans?

What are the Top 5 Alternatives to Payday Loans?
  • Opening Intro -

    Payday loans come in very handy for most of us during emergency situations.

    But the fact is that they are very expensive in the long run and only adds more financial problems

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That is why it is important that one considers other options before deciding to take such loans. Here are some alternatives:

1. Save

The key to saving is proper planning. You should have a realistic budget, only containing the necessary items you will need for the month, and set aside a certain percentage of your monthly income for savings. It may be difficult but try as much as possible not to purchase things that are not within your budget. This way, you will be able to save some money for rainy days and avoid the need to borrow money.

2. Consider A Bank Loan

Depending on your savings and credit history, your bank may offer you a short-term loan to take care of your financial problems. Contact them and find out if this is possible. There are community-based organizations that also provide people with business loans. If such organizations exist in your area, pay them a visit and find out if they can assist you.

3. Request For Extended Pay Time From Billers/ Creditors

If your bill or loan is due and you have no money, it is important that you let your creditors know of your situation, then request them for an extension to the payment period. In most cases, you will be given more time to get the money, if your request is genuine. Be sure to find out if there are additional charges you need to pay for the extension.

4. Overdraft Protection

You need to determine if your bank can provide you with an overdraft protection plan for your checking account. Some people have the tendency of regularly withdrawing all the money from their accounts; well, overdraft protection can protect you from additional credit problems. Ensure you are informed about all the details you need to know for instance, what it covers and how much it costs.

5. Consider Consumer Credit Counseling

In every state, there are nonprofit organizations that provide consumer credit guidance services at no – or low – charge. They can help you in case you need assistance in coming up with a plan to repay your debts. Some employers and credit unions also offer the same services; find out if they can be of help.

Overall, payday loans may solve your financial problem in the short-term, but they worsen your financial situation in the long-term. So, before taking such loans in the future, consider any of the above options. But, if you must borrow, ensure you limit the amount to only what you can afford to pay come your next paycheck.

If you found this article informative, please share it on social media.

Sources

https://www.nerdwallet.com/payday-loan-alternatives

http://ptla.org/alternatives-payday-loans

https://www.thebalance.com/alternatives-to-payday-loans-960046

https://www.creditsesame.com/blog/loans/alternatives-payday-loans-for-cash/

https://www.credit.com/loans/loan-articles/six-smart-alternatives-to-payday-loans/

Money Management reference:

tips on other financing options

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