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Find alternatives to a payday loan.

Cash advances and payday loans are an expensive way for people to get money in an emergency for paying their bills, however there are alternatives. Many individuals often turn to them as a last resort. The interest rate that consumers pay on a payday loan can go up to 300% or higher. The good news is that there are cheaper alternatives now being offered by banks, credit unions, the FDIC and other lenders. Find some ways to get money other than a payday loan below.

Not only that, but the government is now involved in offering alternatives to payday loans as well. They are doing this to protect low income families and those that may not be as well educated when it comes to financial matters. In addition, many state government are starting to regulate payday lenders that operate in their states a little more closely. So there is some relief and additional options for consumers.

While some of these alternatives could still have interest rates that range from the high teens to a still very high 100%+, but they are still much better options for individuals who need immediate cash. Find details on many of the alternatives that consumers have below, and get information on various options that people have.

Each one of the other sources of funding is listed below. While in general, these should always be used as a last resort, it still is always a good idea to look into all different types of short term loans and alternatives to cash advance loans. Bowwows should even consider other options, including side jibs, selling stuff online, websites and other programs that can provide emergency cash.

Direct deposit and checking account advance loans from banks

Many regional and national banks have come to the realization that consumers need some type of lower interest rate alternative to payday loans. To meet this demand they are starting to come out with their own products and offerings. While the interest rates charged by banks are still not cheap, the fact is that they are much lower than salary advance loans or other sources of borrowing from payday lenders.

US Bank Checking Account Advance - This product is marketed as a short-term line of credit that is offered to consumers in which the customer can borrow money, in advance, from an upcoming direct deposit that is scheduled to go into their checking or saving account. Read more on US Bank Checking Account Advance.




Fifth Third Bank Early Access short term loan - This is another payday loan alternative in which a customer can take an advance on a future direct deposit. The deposit will be automatically repaid after a predetermined amount of time, and it is only offered to customers who have historically been in good standing. Get more details on the Early Access Loan program.

Wells Fargo Direct Deposit Advance Service - Funds will be immediately deposited in your account to help pay for unexpected or emergency expenses and bills. This nationwide, leading bank only offers this product to a limited amount of customers who bank in certain states. Get more information on the Wells Fargo Advance.

Federal government FDIC short term, small dollar loans - The Federal Deposit Insurance Corporation (FDIC) is partnering with regional banks in an effort to provide low income and other struggling consumers with access to more affordable sources of emergency money. Dozens of lenders across the nation are participating, including some credit unions.

Borrowers that are looking for an alternative to a payday loan, but have poor credit scores, can get help from this program. It will give households access to a short term, low interest rate product known as small dollar loans. The goal of the government is to try to improve access to credit and emergency funding. The interest rate is capped at a reasonable rate to help facilitate lending and borrowing for low income individuals. Learn more on the FDIC small dollar loan options and why these can be effective alternatives.

Car title payday loans - Some lenders will allow a family to borrow money using their automobile as collateral. This is a similar form of financing in that the client is given a certain amount of cash based on a future obligation. However in this case the family will not be repaying the loan with their next paycheck, but they are risking their car in order to borrow from the lender. There are also alternatives available in these cases as well. More information on car title loan assistance.

Get Paid Daily - A number of companies now allow hourly workers to get their wages each and every day, or even instantly. It in effect means you do not need to wait a week or two for a regular paycheck. While there are fees to using the service, getting paid daily is a solid alternative to using a payday loan as the cost is much more. Learn about the cost of getting paid daily and how to do it.





There are several other payday loan alternatives and sources of short term cash. They involve everything from taking a short term job contract, selling possessions, using technology to make a few extra dollars, and more. Each of them has pros and cons, but they can be explored. Find a list of free money programs that do not involve loans.

Credit unions offer alternatives to payday loans

Salary advance loans - Many credit unions are offering a low interest rate alternative to their members. They are usually packaged as a comprehensive program that offers both financial counseling, a savings account, and counseling. One an applicant applies, they can be given a low interest rate salary advance loan. Learn more on credit union salary advance loans.

Stretch pay loans - This is a newer offering from some credit unions. It is is a very low interest rate alternative to payday loans, with rates capped at a very reasonable interest rate that will make the money easier to repay. Get additional details on stretch pay loans.

Small dollar, short term installment type loans are also be used by many lenders now. They are providing families, in particular those with a low income or poor credit, a strong alternative to a payday loan. Many different types of banks, online companies, and even credit unions provide this form of financing. Read more on short term loans.

State regulations of payday lenders

If after exploring the different alternatives to high priced payday and salary advance loans, if you still have no other choice but to use those lenders, then be sure you know your rights. Each customer should have access to the information on the laws and regulations in place that are intended to protect borrowers. There are many consumer protections in place. While they may not be true payday loan alternatives, they are still effective in mitigating risk.

Many states now regulate lenders, including putting limits on how much a consumer can borrow. In addition, most states will often determine what the highest interest rate that can be charged is. You do not want to be taken advantage of by a payday lender. In addition to exploring alternatives to them, read up on payday lending laws in your state.

Most states have also created government agencies that consumers can contact in order to file a complaint or receive information on their rights. It may be an attorney general, banking department, or some other consumer affairs division. They can also provide suggestions on alternatives for borrowers, help people to ensure they are treated fairly and that they are not subject to predatory or unfair payday lenders. Click here payday loan regulators by state.

Consolidation of payday loans

If you currently have outstanding payday loans and/or will be using one to get emergency cash, you should strongly consider consolidating them. As the fact is that sometimes people do not qualify for any alternatives and have no other choices but to use a salary advance loan. So if you do need to use one, be sure to pay it off as soon as possible. Consolidation is a great way to do this. More on payday loan consolidation.

Get a payday loan alternative from credit counseling

Many individuals who take out payday or salary advance loans to pay their bills or other living expenses probably have some type of more significant credit or financial issue. There is often some other form of hardship that is ongoing. The borrower may have a poor credit rating, have a history of managing their money irresponsibly, or they may just be down on their luck and have no other options available to them.





Regardless, it is usually a good idea to speak to a non-profit credit counselor for advice. They can go over the alternatives to using a payday loan, discuss their often free debt counseling services, and help borrowers with other financial obligations they have. They are also a source of information on loan programs from credit unions as well as mainstream lenders.

As just one example of what a not for profit credit union can offer borrowers, hundreds of local branches now provide low interest rate, emergency loans from the Credit Union Payday Alternative Loans and Savings program. The client may be able to receive the cash they need at a more affordable interest rate. Any type of funding from one of these organizations is also combined with budgeting and financial counseling to help the household over come any hardship. So there many other alternatives available in the marketplace.

The services are comprehensive, and are often provided at no cost to the client. A credit counselor may be able to offer you additional alternatives to a payday loan as well as they will generally recommend never to use that form of borrowing. Click here for a listing of national credit counseling agencies that can also help you address or eliminate payday loans.


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By Jon McNamara

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