Six better alternatives to payday loans

While payday loans have received a lot of publicity in recent times, it would be fair to say that they aren’t the most attractive loan option available to people.

You should look for other finance sources before you think about a payday loan. It really needs to be a difficult situation for you to think of using a payday loan, and even then, it should only be as the very last resort. This is why you should look at the alternatives to a payday loan, and these will hopefully help you obtain the finance you need.

Ask for an advance on your pay

If you are currently in employment and you need money in a hurry, it may be that asking your employer for an advance on your pay could be the best option.

It may be that your employer is in a similar situation to you with respect to finance, or they may have a blanket policy with respect to this situation, but if you don’t ask, you never know what sort of finance is available to you.

Asking for an advance on your pay works along the same lines as the concept of a payday loan, you are drawing money from your next pay forward, but with this solution, you don’t have the same high costs that are associated with a payday loan. If your company is agreeable to your request, you will find that this is a great solution for your financial needs.

Borrow from a credit union

If you are a member of a credit union, you should look to put your money towards proper use. The amount of money you are able to borrow will depend on your level of savings and the terms and conditions of your credit loan account. However, if this is a viable solution, you will find that it is a far more attractive solution than borrowing from a payday loan company.

Borrow from friends or family members

This is an area that many people would prefer to avoid, and that is perfectly understandable. Asking friends or family members for money isn’t a situation that makes you feel good, and there is an acknowledgment that this could problems at a later date. Borrowing and lending can cause issues between people who were previously very close, so be sure to approach this style of financial solution with good care.

However, you will often find that friends and loved ones are very keen to provide you with financial assistance if they can. You’ll likely find that you will receive the financial backing at a much more attractive rate.

Use a credit card

If you have a poor credit rating, you may not be successful when applying for a credit card, but it remains an option that you can consider. If you have an existing credit card, it could be that using your credit card for a financial solution will provide you with the short term support that you need to resolve the financial matter.

You should always be careful when using a credit card and you should look to pay off the balance as quickly as possible. However, it is another option that is worth considering and it may provide you with the short term support you need.

Use an authorised overdraft

If you have a bank account, you may be able to arrange your overdraft to give you access to additional funds. This should not be considered free money, and you will have to pay a fee and interest for this service. However, it may provide you with the assistance you need to ensure that you can resolve any short term financial matters.

Obtain a guarantor loan

If none of the other options are available or suitable for you, but someone is willing to vouch for you as a guarantor, a guarantor loan is going to be a great option to consider. A guarantor loan is available at a much more affordable rate of APR compared to a payday loan. This means that you can get the money you need in a hurry without having the high cost of finance. When it comes to being sensible in arranging finance, this is definitely a great way for you to arrange a loan.

Hopefully you will have learned that there are a number of alternatives available to you that don’t require obtaining a payday loan.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn't sat behind a laptop or researching a story, he will be found watching a gig or a game of football.

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We would love to hear from you about your experience with alternatives to short term loans.