Can You Avoid A Payday Loan? Are There Alternatives?

Payday loans offer people with little or bad credit a means of getting a loan quickly as long as they are getting a steady paycheck. The high interest that these loans incur is generally not worth taking out this type of loan. Most people who take out payday loans do so because that they feel they have no other options. However, in many cases you can avoid a payday loan by exploring a few other alternatives.

The first option you should consider is simply not taking out a loan at all. If you don't truly need the money for a real emergency then don't borrow it. Cutting back sharply on expenses may be the best way to make that paycheck stretch until the end of the month. If the money is needed to pay a utility bill or purchase baby food or diapers then try talking to local churches and charities to see if they can help out. Utility companies will often make payment arrangements to help their customers over a rough patch. While some people feel embarrassed to ask charitable organizations for help it is better than incurring a debt that may be difficult to pay.

Credit union members may be able to get a small loan from their credit union even if their credit isn't the best. Several credit unions seeing the toll that payday loans were having on their customers decided to do something to help credit union members in need. Their solution was to offer some small short-term loans with a much lower interest rate. Those people who qualify for these small emergency loans find it easier to pay back the credit union since the payback time is somewhat longer and the interest rate is a great deal lower. Best of all, paying one of these loans off on time may actually help to increase your credit rating.

Borrowing from a relative, friend, or even employer may be an option to consider. In most cases loans from any of these sources are interest free and affordable payment arrangements can be made instead of having to pay the entire loan from one paycheck. Make sure to make the loan payments to these sources on time in order to maintain healthy relationships.

Another alternative to that payday loan is earning some extra income. Selling something on ebay, having a rummage sale or picking up some odd jobs are all ways to earn that extra income without resorting to a payday loan. In some cases bartering may be an option. For example, if you need the money for car repair perhaps, you could buy the parts and have a neighbor make the repairs in exchange for your mowing his lawn or helping him with some home repairs.

In this day and age with jobs in short supply and money hard to come by it is easy to understand why someone might need to get money for an emergency quickly. However, if possible take a little time to explore all the other options. Doing so may well save you from a decision that will lead to a financial crisis that will be difficult to resolve.