When it comes to the week before payday, a lot of American’s find that their funds fall just short of their needs. For many people, payday loans seem like the solution to their problem, but this often ends up landing them in a more difficult position than before. Payday loans are extremely costly cash advances that are marketed toward cash-strapped consumers. Due to their triple-digit interest rates, and often unaffordable repayment terms, borrowers run the risk of trapping themselves in a vicious financial cycle.

Fortunately, there are other options if you need a financial boost before payday. Here are five top alternatives to PayDay loans. 

Personal Loan

When you find yourself in a pinch, you should head to your bank and discuss what options they have available for you. Although you may assume that a personal loan will take too long to process, it can actually be a lot quicker than you think. In addition, personal loans tend to have much more affordable terms than payday loans.

If you’re concerned about your credit, it’s useful to know that community financial institutions often have a more lenient underwriting procedures and lower interest rates than major banks. It’s also important to note that online lenders, like Earnest and SoFi, enable borrowers to view what rates and terms they could qualify for without pulling a hard credit check. The best part? Once approved, you could receive your cash in just a few days.

Payday Alternative Loan (PAL)

Payday Alternative Loans, also known as “PALs,” are short-term loans offered by credit unions. These loans are provided to help borrowers stay clear of unaffordable, high-interest payday loans. Available in amounts of up to $1,000, with terms of up to six months, PALs are an excellent solution for borrowers who need a quick cash boost.

One important point to remember is that to be eligible for a Payday Alternative Loan through a credit union, you must be a member of the credit union.

Paycheck Advance

If you have a good relationship with your employer, a cash advance on your paycheck could be the solution to your cash flow problem. Not all companies offer this, and the terms and conditions can vary significantly, so it’s important to discuss your options.

If you’d like to find out whether your employer offers a cash advance service, you should speak to your human resources department, or directly to your boss. It’s also crucial that you stay professional at all times when explaining your situation, as this will help to avoid any miscommunications and hindrances to your professional career.

Family and Friends

If you want to avoid paying high interest and potentially damaging your credit, the solution may be loaning cash from a trusted family member or friend. This may involve a dent to your pride; however, it could save you hundreds of dollars in the long term.

Depending on your relationship, it may be necessary to offer interest as part of your repayment terms. This shows good faith on your part and may help assure the other party of your intention to pay back their loan.

Credit Card Cash Advance

Although credit card cash advances are not the optimal option when the need for quick cash arises, the fees and terms on offer could be better than those of a payday loan. Credit card issuers typically charge a fee for the advance, and there is often a minimum amount required.

A more expensive option than the others listed above, paying off your credit card cash advance immediately can help you avoid prolonging high-interest charges on your balance.

It's crucial to remember that although financial strain can be stressful, high interest payday loans aren't your only option. Before you take out a loan, you should research all of your options and weigh up the financial implications of your decision. Interest rates, fees, and loan terms differ significantly from lender to lender, so be sure to think carefully about your decision.

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