1 September 2023

Is There a Payday Loan Alternative?

payday loan alternative payday loan alternative

We get it: it’s tough to say “no” to fast cash. Payday loans make a lot of appealing promises, from quick processing to easy access when you have bad credit.

However, these loans are also more predatory than you’d think, with high interest and exorbitant fees. One survey found that less than half of Canadians understood how much more expensive these loans can be than other options!

Where do you turn when you need a good payday loan alternative?

Fortunately, there are plenty of great resources. From getting a line of credit to taking out personal loans from lenders like Credito, the right options can help you get back on your feet fast. Here are a few paycheck loan alternatives to consider.

Personal Loans

Personal loans are the most obvious alternative to payday loans. Like payday loans, they offer fast funds in customizable amounts with few requirements. You can often choose your own loan terms based on how much you can pay back each month.

However, some people fail to consider these a viable option. If you have bad or no credit, for example, many banks and credit unions will turn you away.

Online lenders, on the other hand, are often a better option. These loans have longer repayment terms than a typical payday loan, but you can get them just as fast. You’ll also see lower APRs.

With online lenders like Credito, you won’t even have to worry about bad credit. Loan approvals are still likely as long as a borrower can repay the loan.

You’ll still have to pay a higher APR than you would for a typical credit card, but it will be less than you’d pay for a payday loan. In addition, unlike with payday loans, you don’t have to repay a personal loan all at once. Instead, you’ll make smaller payments over time.

Last, keep in mind that you can often build good credit with a personal loan. Most lenders will report on-time payments to credit unions, which isn’t always the case for payday loans. Both companies will also report missed payments, so make sure you’re paying on time!

Payroll Advance

In contrast to a payday loan, payroll advances allow you to skip the middleman. With a payroll advance, you’ll talk directly to your employer to ask for a cash advance on your future paychecks. If you are going through a financial emergency, your boss may be empathetic and willing to help, but not all companies are willing to offer this benefit.

A payroll advance is a short-term loan, so you’ll have to navigate the details with your employer. There may be limits on how much money you can receive in advance.

In many cases, employers will offer a payroll advance with little to no interest, making this a great option if you can swallow your pride and ask. You also won’t need a credit check. You won’t have to remember your repayment schedule either, as your employer will typically withdraw each payment from your paycheck over several months.

Credit Cards and Cash Advances

If you don’t want to deal with loan approvals and you have a minor financial crisis that you can pay for with a credit card, it’s a much better option than taking out a payday loan. Credit cards have lower APRs than these predatory loans.

Some borrowers with bad credit might feel they’re unlikely to get approved for a credit card. This isn’t always true: you may have fewer options to choose from, but bad credit and no credit users can still try this alternative.

Credit card cash advances are also an option here. Keep in mind that your creditor will charge you fees for this, but the cost will still be lower than the cost of the typical payday loan.

Cash advance fees often range from $5-7 in fees and 20-30% APR. Read the fine print on your credit card’s documentation or call your creditor for specific details.

As with the other options on this list, if you pay off the balance as soon as you can, you won’t have to worry about the APR at all.

Secured Loans

Where the quick loans above don’t ask for any collateral, secured loans will ask you to put down an item of value.

This item can be anything, from precious jewelry to your car or home. The requirements will vary from lender to lender. For more expensive items, you may need to prove ownership of the collateral with a receipt, bill, land title, or other document.

You may also hear of secured loans under other names. Title loans and pawn loans are common terms.

Keep in mind that if you fail to make your payments over a set period, your lender can seize your collateral. This helps lenders minimize their risk, but it means you should make careful financial plans when taking out these loans!

Friend and Family Loans

Last, but not least, consider tapping your social network for a loan. Asking for help can be hard, but too much pride will cost you if you take out a payday loan instead.

Friends and family members may be able to loan you small amounts of money in times of emergency. The best part of this option is you won’t have to pay any interest. However, it’s always helpful for both parties to put the details in writing.

Always be sure to repay their kindness by repaying your debt! The last thing you want to do is take advantage of someone who trusts you.

Try Credito as a Payday Loan Alternative

Quick cash can be tempting, no matter where it’s coming from. However, finding the right payday loan alternative can keep you from regretting your borrowing decision for weeks or months to come!

That’s where Credito comes in.

Our online personal loans don’t require a credit check, and same-day processing means you can get your cash today. Even better, you can choose your repayment frequency, and there are no hidden charges. If you’re ready to get fast funds without the predatory terms, request a loan today.

Get your cash loan without ever leaving your home

Get my loan

Recent posts