It’s no secret that payday loans come with high-interest rates. If you’re in a bind and need money fast, a payday loan might seem the only option. But several payday loan alternatives can help you avoid paying high rates and give you cash when you need it. Here are payday loan alternatives to save you from paying a high rate
3 Payday Loan Alternative To Save You From Paying High Rates
1. Create Alternative Ways To Make Money
Improving your income is the best way to avoid high-cost payday loans. If you’re struggling to make ends meet, look for ways to increase your income. You may be able to get a better-paying job, start a side hustle, or negotiate for a raise at your current job.
A few online opportunities include:
- Take online surveys
- Sell unwanted items
- Provide freelance services
- Participate in focus groups
- Rent out a room in your home
- Drive for a rideshare service
- Work as a pet sitter or dog walker
- Do odd jobs for people in your community
There are also several governments and non-profit programs that can help you make ends meet.
- The Low Income Home Energy Assistance Program (LIHEAP) can help you pay your energy bills.
- The Supplemental Nutrition Assistance Program (SNAP) can help you buy food
- The National School Lunch Program provides free or reduced-cost lunches for children
No matter your financial situation, there are always ways to improve it. If you’re facing high-cost payday loans, take a look at your income and see if there are any ways you can increase it. A little extra money each month can go a long way in helping you avoid the high costs of payday loans.
2. Borrow From A Credit Union
You may get affordable rates, terms, and helpful services from a credit union. An alternative payday loan (PAL) is a short-term loan offered by some credit unions.
With a PAL, you can borrow up to $200 for one month. The application process is similar to a payday loan, but the fees are much lower. For example, a $40 fee for a two-week loan equals an annual percentage rate (APR) of about 30 percent, whereas the APR for a PAL is generally below 28 percent.
If you compare Credit Union to Traditional banks, Credit Union offers higher interest rates on their savings accounts and lower interest rates on their loans. To join a credit union, you generally need to live or work in its field of membership or have some other connection to the credit union.
3. Form A Lending Circle
You should consider creating a lending circle with friends or family members if you need money for an emergency. This is when a group of people each contribute a set amount of money to a pool. Then, one person in the group takes turns borrowing the money from the pool.
Lending circles are great because:
- There is no interest
- You can borrow as much or as little money as you need
- The repayment terms are flexible
- You can develop a system to make sure everyone gets a turn borrowing the money.
If you decide to form a lending circle, be sure to:
- Choose people you trust
- Develop clear rules and guidelines
- Keep good records
- Make timely payments
With Viva Payday loans, you can receive instant payday loans online with no credit check and have the money you need in as little as 24 hours.
A few online lending circles include:
- Prosper
- Lending Club
- Upstart
4. Get Help With Bills Through Payment Plans
If you’ve got a hard time paying your arrears, you can make a payment plan with the company. You’ll have to pay off the total amount you owe, plus interest and fees, but you’ll get to do it in smaller payments spread out over time.
This will help you get caught up on what you owe without taking out a high-interest loan. You can also do this with utility companies and other types of bills.
Just make sure that you can afford the payments before agreeing to the plan. If not, you could default on the payment plan and further damage your credit. If you’re struggling to make ends meet, you can do a few things to get help without taking out a loan with sky-high interest rates.
Talk to your creditors and see if you can work out a payment plan. You might be able to negotiate a lower interest rate or extend the time you have to pay off the debt.
You can also look into government assistance programs or nonprofit organizations that might be able to help you with your bills.
Wrap Up
So there you have it, the viable alternatives to high-rate payday loans. By taking some time to explore your options and understand the terms of each type of loan, you can make an informed decision that fits your unique financial situation. Don’t let high rates keep you from getting the money you need – there are plenty of other options.
