If you need quick cash with no questioning or credit score investigation, getting a payday loan can be the best option. However, instead of payday loans, you can check other alternatives that don’t have high fees and interest.
You may think that you hit the jackpot when you get the cash during an emergency. What you don’t know is that you’ll face a bigger dilemma when you pay it for the next paycheck.
Payday loans have a high annual percentage rate (APR). This is the reason why most borrowers cannot repay it in full or on time. Cash advance like this must be your last resort or your finances will spiral-out-of-control.
Instead of this short-term loan, there are other alternatives that you can consider:
- Apply for a personal loan.
Like a payday loan, a personal loan is unsecured. You don’t need any collateral to apply for it, so it is easier for you to get qualified.
It has unique features, such as it is paid in installments, and it has long-term payment. You can pay small payments over a period of time that is easier for you to manage.
You can apply it from credit unions, banks, and online lenders. They offer fixed interest rates while the term is between 2 to 7 years. The time allowance gives you more time to repay them back.
Personal loans can help improve your credit score. Don’t forget that it is better to get this type of loan if it offers a low APR.
- Bank overdraft.
Talk to your bank regarding an overdraft protection plan. This is a form of credit where you can borrow money even your account reaches zero balance.
It allows the borrower to withdraw even the account has no money or it is below the maintaining balance. You have to pay an overdraft fee amounting to $35 and up.
When you have an overdraft plan, the bank covers the amount instead of having a bounced check. If you have to pay bills, you can continue paying it even you don’t have funds.
- Sort out a payment plan.
If you are running out of budget for your bills, why not talk to them and ask for a payment plan? Ask them if you can have a payment plan that would work best for both of you.
You may be surprised that most of the utility bill companies are ready for this kind of settlement. A payment plan is best because you can pay them even it’s late. Make sure to pay if you don’t want to be reported to the credit bureaus.
Ask them if you could pay in small payments or suspend it until you can pay at a specified date. Talk to them on how you can pay the bills in a way that is easier for you.
- Use a credit card cash advance.
If you have a credit card, you can use it to get cash advance. Although it may be costly because of charges, it is still cheaper than a payday loan. To avoid incurring high interest, pay it the soonest possible time.
- Borrow from a friend or family.
Instead of getting loans from a lender, you can borrow personally from your family and friends. You can also use zero-interest credit card to pay for a friend or family expense and they pay you in cash. It is not advisable for everyone because it can damage relationships if you are not very careful. Take your financial obligations seriously even you know them very well.
- Ask your employer.
Another option that you can take is getting cash advance from your employer. You can talk to your boss directly or to your Human Resource head about it.
You can take an advance payment of your salary. This is a better alternative than any other credit because it doesn’t charge you fees or interest.
Aside from that, you can talk to them regarding the terms. You can suggest a payment term that would be easy for you to pay without affecting your current paycheck.
- Borrow from a credit union.
Credit unions are non-profit organizations built by people who share a common ground or community. Its main role is to provide financial assistance to its members.
Not all can be a member of a credit union. You need to satisfy certain requirements to be a member. It offers small, short-term with lower APR.
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