5 Alternatives To Taking Out A Payday Loan

AdminBy AdminOct 27, 20170

When you’re living paycheque to paycheque, any unexpected problem could send your personal finances spiraling into disaster. Payday loans might seem like a quick fix solution to a temporary money problem, but with incredibly high interest rates that can add up to as much as 1000% APR or even higher, failure to repay a payday loan on time can leave you in a spiral of debt bondage that could take years to escape from.

Payday loans really should be considered an absolute last resort. Before contemplating taking out, make sure that you’ve exhausted all other options. Here are five other solutions to consider before turning to a payday loan to make up your shortfall.

Speak To Your Bank

Speak To Your Bank

Unplanned overdraft fees have the potential to be just as damaging to your long-term finances as a payday loan. But if you have a good relationship with your bank, meaning that you’re not normally living in the red, they may be able to help you out of a bind.

It’s always a good idea to speak to your bank to see if you can get an overdraft facility added to your account, or an extension added to any existing overdraft. This is likely to be far less costly in the long term than a payday loan and is a much better first choice option for emergency borrowing.

Source Things For Free

Source Things For Free

If you need a payday loan to cover essential expenses like food, you should first look out for alternative sources, such as food banks. Food banks exist purely to help out people who are struggling to afford to eat. If you’re considering a payday loan for this reason, food banks are there to help you out.

Try searching online where you can find a food bank in your area. There may be other items that you feel you need immediately, but before turning to a payday loan to cover the cost of these items, you can see if there’s anyone willing to lend you the items you need, or even give you them for free.

Try asking friends and family if you can borrow the item you need from them. A quick Facebook post is a great way of immediately letting everyone in your social network know what you’re looking for.

Alternatively, sites like Craig’s List are full of people giving unwanted stuff away, and you may get lucky and find exactly what you’re looking for, without having to pay for it. Similarly, there are an infinite number of Facebook groups dedicated to people looking to swap items or give them away for free.

Find An Odd Job

Find An Odd Job

Facebook groups and sites like Craig’s List are a great way of sourcing free items, but they can also be a way of generating some quick cash. People looking for odd jobs, such as cleaning or gardening, will often use Craig’s List or Facebook groups to advertise. Check out the pages relevant to your local area and see if there’s anything you can do to make a quick buck.

You may be surprised by just how easy it can be to earn some quick cash that will negate the need for you to take out a payday loan to cover your expenses.

Sell Something

Sell Something

The old saying “one man’s trash is another man’s treasure” exists for a reason. Old and unused items gathering dust in your home may be just what someone else is looking for. Take a look at any odd or unusual items you have lying around and see if there’s anyone on eBay, Craig’s List, or Facebook looking to buy that very thing.

You may be surprised how much your old junk can sell for! Even if this search proves fruitless, selling items such as televisions and appliances can get you out of a bind in a hurry. If you have valuable items you wouldn’t mind being without for a short period of time, heading to the nearest pawn shop can be a good way to generate some quick income. Buying back these items when you’re more financially sound may be much better for your long-term personal finances than taking out a payday loan.

Always Budget An Emergency Fund

Always Budget An Emergency Fund

This advice may sound patronizing when you’re in a position where taking out a payday loan seems like your only option, but the circumstances that lead to this problem are a clear sign that something has gone wrong with your budgeting. If every cent you earn is accounted for in your outgoings, the harsh truth is that you’re spending more than you can afford.

Life happens and you never know when a money-draining problem might arise again. Always make sure you have some money set aside so that the kind of problems that leave you contemplating taking out a payday loan can be avoided in future.

Conclusion

Payday loans may seem like a quick fix to short-term financial problems, but they can end up saddling you with crippling debt that can take years to break free from.

If you’ve absolutely exhausted all other options and really have no alternative left but to turn to a payday loan company, make sure you shop around for the best rates available to you, and always make sure you pay them back as soon as possible.

The spiraling debt resulting from an unpaid payday loan could land you in a much worse financial predicament than the one you know find yourself in.

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