Payday Loans

Avoid Sky-High Payday Loan Fees – Try These 9 Alternatives

Are you into a temporary cash crisis and have to meet some urgent financial needs? If so, you might be looking out for short-term cash advances as a quick and easy solution. But, do you know that payday loan fees can be very high? You may have to pay $673 in fees on a $300 of loan (just an example) if you fail to make the repayment in time. The APR on these loans is generally around 400% per annum and can go up to 600% or even more. Once you get into the viscous cycle of debts caused by payday loans, it becomes very difficult (sometimes almost impossible) to get out of it. Therefore, you are strongly recommended never to go for these predatory lending programs – they are just there to suck you financially. Following is a list of 9 far less expensive alternatives to borrow cash when you need it.

Borrow From A Credit Union Or Bank

These days many banks and credit unions offer small loan programs, which can be a much better alternative to avoid those unreasonably high payday loan fees. You can easily qualify for these small personal loan programs if you have pretty good credit and have a steady income. As compared to payday lending, these programs charge you comparatively very low interest and provide you money on much better terms.

Get A Loan From Your Colleague, Your Family Member, Or A Friend

Asking a family member or a friend to lend you some money might be risky in a way that mixing money with relationship often does not give great results. Still, if you manage to borrow from them, you can easily avoid getting caught by those payday lending sharks. In order to let this option work, you can consider signing a written contract in order to convince the person you are borrowing from that you are very serious about making the repayment. Make sure you repay them in time as promised.

Take Advantage Of Those Local Emergency Hardship Programs

There are several organizations that run an array of local emergency hardship programs to protect consumers from getting into serious debt traps that often result from high payday loan fees. The places you can look for help in this regard include humanitarian organizations and local churches. The Department of Human Resource in many states also offer such financial assistance programs. So, you can try contacting your local HR department also.

Get An Advance From An Employer

The process is same – you take a small amount of money in advance and promise to make the repayment as soon as you get your next paycheck. But, when you take an advance from your employer, there is no risk of getting into a loan trap. Besides that, you do not even have to pay excessive fees. Therefore, this option is worth your consideration. Many employers may even agree to offer you a cash advance with the convenience to make the repayment in several small monthly installments. On every payday, they will deduct an agreed amount of money from your salary.

Get A Side Job

Earning more is a great way to get extra money. When you get a side job, you can get cash without needing to pay sky-high payday loan fees. This alternative can work for those people who have a skill or hobby that is in demand. For example, if you can write articles or design a website, you can get some freelance work even on a very short-term (a couple of days to a week) contract, which can get you some instant cash. Other hobbies or skills that can help you get a side job and earn some extra money include gardening, health and fitness (you can become a lifeguard or teach exercise classes or work as trainer or assistant in a gym), cooking (you can teach cooking classes), music (you can give private lessons), sports (you can work as a statistician, scorekeeper or personal trainer), photography or videiography (you can work on a freelance basis), art and crafts (you can sell your work in an art gallery), and even shopping (you can work as a mystery shopper).

Work Overtime

If you cannot get a second job, consider working overtime for your employer. A few extra hours of work can help you earn a decent amount of extra money. Obviously, this strategy to avoid payday loan fees will work only if your employer allows you to work overtime on pay.

If You Need Money To Get Current On Your Other Debts, Consider Negotiating An Alternative Arrangement With Your Creditors

One of the worst mistakes that many people make is that they take payday loans in order to have sufficient fund in their bank account so that the automatic withdrawals on other debts (such as on mortgage) should not get dishonored or the checks they have given to other creditors should not get bounced. It is not wise at all to take out a high-rate loan in order to keep yourself current on a low-rate loan. In such cases, the best thing you can do is to talk to your creditors and request them to extend the due date or accept lower payments for a couple of months during which you will work on to improve your finances, and that once your finances get back on track, you will continue making the regular payments.

Use Your Emergency Fund

If you already have an emergency fund, it does not make any sense at all to borrow money on high payday loan fees. The money in the emergency fund is meant to be used in times when you are going through a short-term financial crisis.

Utilize The Overdraft Protection Offered By Your Bank

Many banks offer their customers overdraft protection, as per which you can withdraw more money than you have in your checking account. You need to pay back the overdrawn money on the next payday. This way, this option is again almost the same as getting a payday loan, but it comes with no risks at all and even the interest rates are also very low. Many banks require you to register in order to take advantage of such programs. So, ask your bank if they offer any such thing; if yes, sign up for the same.

As you can see, there can be an array of alternatives that can help you avoid high payday loan fees. You can go ahead with an option that is the most suitable in your case.

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Posted in Payday Loan Alternatives, Payday Loans | 3 Comments »

3 Responses to “Avoid Sky-High Payday Loan Fees – Try These 9 Alternatives”

  1. Betty says:

    Very enlightening article. First of all loans are taken only in extreme emergency when there is no way out. But please be vigilant while borrowing the loan I have tried taking loan from the same which results in very higher rate of interest plus creditability is also a big issue. Some tricks of the trade is given and is very practical to implement. First of all in emergency take loan only from a public financing company where the company is reliable nad they charge comparatively lower rate of interest. Try to borrow from your friend family members or a colleague. Take some advance money from the company you are working in. Take some new assignment or work overtime. This will prevent us from falling into a debt trap. And the money you have saved in case of emergency can be used to meet the needs. Because its better to consume your savings than to take a fresh loan . Take the overdraft option from a bank so that there is no need to take pay day loan and we should enter into adebt free life.

  2. Micro Jobs says:

    Hey, nice post!! Not sure words can explain the help it’s provided. :) :) :D

  3. Matt says:

    The article has given very strong alternatives to avoid pay day loan, if any one sincerely try these alternatives, he/ she will never be trapped in debt of pay day loan. If you are in a financial crisis, you can get an advance from your employer; this can be beneficial for both of you. You can try for over time also, if you can increase your earning from overtime or from an extra job, it will improve your financial status. Your friends, relatives, colleagues can also help in this field. You can borrow some money from them but the only thing is that you have to repay the money with great punctuality otherwise money factor can spoil the relations. Some times, people take a pay day loan to repay their other debts which is a totally wrong decision. If you have an insufficient amount in your bank account, you can talk to your creditors for some extra time or any other option available but never go for getting a pay day loan to repay your existing loans, it will only make the problem from bad to worst. If you have an emergency fund, it is the right time to use it.

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