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Alternatives to Payday Loans

Payday loans help people who are short on money. Your car may need repairs you cannot afford until payday, but you can't get to work without your car. Situations like that are never easy, and it's the most common reason people look at payday loans.

These loans are not ideal for everyone. Those who rely on a quick loan to get through a tight spot need to make sure they can pay the entire loan and applicable charges on the due date. If you're not certain, it's best to find an alternative to a payday loan.

Talk to Your Creditors

Not every company is understanding, but if you explain your situation to your creditor they may offer to lower your upcoming payment or extend the due date. Try this first.

Ask Friends and Family

In a pinch, it's best to ask close friends and family if they can loan you some cash until your payday arrives. Sign an IOU and stick to your agreement. If they simply cannot afford to loan you money, don't walk away with hurt feelings. They may well be in a similar situation.

Research Loan Products at Your Bank or Credit Union

Many banks and credit unions have financial products in place that offer short-term loans, sometimes called Payroll Advance loans. At the California Credit Union, borrowers pay a $7.50 finance charge on every $92.50 borrowed. Lyell Federal Credit Union in Orlando, Florida, offers personal loans for up to $15,000 with an APR as low as 11.6%. Even TD Bank offers unsecured personal loans in many areas.

Ask Your Employer for an Advance

Some employers are in a great position to offer an advanced payment every now and then. Talk to your human resources department, explain the situation honestly, and see what they say. The worst they’ll say is no, but many will allow the advanced pay once in a while. They understand that emergencies happen. Don't make a habit of it, however.

Cash in Vacation Days

Many companies allow you to trade in vacation days for a lump-sum cash payment. Find out from your employer if they offer this service. You'll lose out on some vacation time down the road, but you get the money you need to prevent financial strain. Your employer benefits by having you there to handle the work load during busy periods.

No matter how you decide to handle your financial issue, don't give up hope. There are alternatives to payday loans. Plus, many states have regulations that keep payday loan fees from being too expensive. If you are struggling to pay the bills, start with your creditors and then work your way down the list, but save a payday loan as a last resort.

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