Payday Alternative Loans

Payday loans come with high-interest rates and fees that mean you could pay 25% of the loan value or more for a two-week loan. With annual percentage rates (APRs) or 400% or more, if you aren’t able to pay off the loan, you risk being trapped in a cycle of debt. Most consumers choose payday loans because they think they don’t have an alternative. That’s why the payday alternative loans below can help. Read on to learn how to get fast cash without paying absurd fees. 

Reasons to Consider Payday Loan Alternatives

While payday loans seem attractive because they don’t require a credit check and give you money the same day, because of the fees for this convenience, they are rarely the best solution. The main reason to consider payday loan alternatives is to save money. When you’re short on cash, the last thing you need is an extra $100-plus in interest and fees. 

When you take on a payday loan, it generally has a high-interest rate, and fees make the rates even higher. Small payday loans can come with even higher fees. If you need $300 in fast cash, you could be forced to pay back $400 or more two weeks later. For families struggling to make ends meet, that extra $100 can make the loan difficult to repay. 

In addition, many payday lenders target people who may struggle to pay back the loan, trapping them in a cycle of debt with increasing interest and fees. While you might be able to find the best payday loans online, they still come with high fees. 

Fortunately, many payday alternative loans offer the same benefits with lower costs. With the options below, you’ll take on less risk, more easily repay the loan and build a positive credit history. 

10 Payday Loan Alternatives 

If you’re ready to get fast cash without losing money to exorbitant fees, the 10 payday alternative loan options below offer ways to secure funds when needed. In the long run, the best payday loan is no payday loan, and these solutions offer cash that can help you better protect your family’s financial future. 

Personal Installment Loans

Personal loans are typically offered by traditional banks, credit unions and online lenders. They allow you to borrow a fixed amount of money and repay it over a set period in regular installments. Interest rates are generally lower than those of payday loans, and the repayment terms are more manageable. 

Personal loan repayments are generally fixed rates over many months, allowing you to plan loan repayment in your budget. 

Credit Union Loans

Credit unions often offer small-dollar loans with more reasonable terms and lower interest rates compared to payday lenders. Many credit unions also provide financial counseling and assistance to help you manage your finances. Credit union loans also offer fixed-rate repayment terms over months to plan your budget and repayment strategy. 

Paycheck Advance Apps

Some financial technology (fintech) companies offer paycheck advance apps that allow you to access a portion of your earned wages before your payday. These apps typically have lower fees than traditional payday loans and can help you bridge short-term financial gaps. While not a traditional payday loan, these are arguably the best online payday loans. Some even offer low fees if you repay the loan within a week or less. 

Borrowing from Family or Friends

Consider asking friends or family members for a short-term loan. Make sure to establish clear repayment terms, write them out and adhere to them to avoid straining your relationships. 

Emergency Assistance Programs

Many nonprofit organizations, community groups and religious institutions offer emergency financial assistance to people in need. These programs can help with basic necessities like rent, utilities and medical bills. Likewise, consider government benefit programs. 

Negotiate with Creditors

If you’re facing financial hardship, contact your creditors and explain your situation. Some may be willing to work with you on a temporary payment plan or offer hardship programs. You can also negotiate repayment plans for debt that are more manageable long-term. 

Peer-to-Peer Lending

Peer-to-peer lending platforms connect borrowers with individual lenders. Interest rates may vary but are often more competitive than payday loan rates. Find some of the best peer-to-peer lending apps here. 

Side Gigs or Part-Time Work

Consider taking on a temporary side job or gig to earn extra income and cover your immediate expenses. These can also offer a long-term alternative income stream. Consider your experience and expertise, and look for jobs in local listings, online or with your contacts. 

Sell Unused Items

Look around your home for items you no longer need or use and consider selling them online or at a garage sale to generate extra cash. Most families have hundreds of dollars worth of unused appliances, sports equipment, clothing, furniture and other items lying around that you could sell to help make ends meet. Consider putting any extra you earn into an emergency fund for later. 

Credit Counseling

If you’re struggling with debt, credit counseling agencies can provide guidance and help you create a budget and repayment plan to get back on track. You can also find tips for building your credit score now.

Using Payday Alternative Loans

With attention and planning, there are a number of alternatives to payday loans that come with low or no fees and allow you to spread out the repayment over several months to reduce the pressure on your budget. Between nonprofits, government assistance and fintech apps changing the financial landscape, you shouldn’t be forced to take a payday loan. 

With the security of knowing you can get funds when needed, also consider building an emergency fund so you’re not caught searching for payday loans again. With planning now, you can use the resources available to reach your short- and long-term financial goals. 

Frequently Asked Questions