How to avoid a payday loan — Free local resources + 8 other alternatives to consider

You have other options to consider before taking out a payday loan.

There’s one particularly good reason to stay away from payday loans: they’re wildly expensive. It’s not uncommon to see a 400% APR on a payday loan, and some providers have even higher interest rates.

There is good news: you have other options.

Before taking out a payday loan, try the following alternatives. They can help solve your short-term money needs while keeping you out of long-term debt.

Local resources in your state

Select your state from the list below to see local resources that offer free financial services as well as help with things like food or utilities to relieve some cash constraints.

8 other alternatives to consider

1. Ask friends or family for help

Consider asking your friends or family to help cover short-term financial needs. They may be more than happy to lend a hand. This type of personal loan often has the advantage of no interest.

2. Consider an installment loan

You can typically get an installment loan quickly and at a better interest rate and longer repayment terms than a payday loan. Some lenders may even look at more than your credit score when evaluating your application. Check out the lenders in the table below for installment loan options.

Compare online installment loans with quick turnaround times

3. Consolidate debt

If high-interest debt is holding you back from meeting your other financial obligations, you might benefit from consolidating that debt. This means borrowing money to pay off multiple debts, then paying off that one loan. This reduces the confusion of having multiple payments and may even offer a lower monthly payment while you eliminate your debt. You could save on interest and pay off your debt faster.

Get out of a payday loan cycle by consolidating debt + other steps

4. Look into a credit card cash advance

Cash advances aren’t always the best option because of their high APRs, but in a pinch, the fees and terms may be better than what you can find with a payday loan. It’s often better to take the high rate for a cash advance that you can pay off over a longer term.

Avoid payday loans with the Build Card for bad credit

5. Find quick ways to make extra cash

If you’re short just a bit of money, you could find a quick gig to collect some cash. Car and house sharing, selling unwanted items and market research are a few ways you can bring in money if you have extra time. The effort may pay off double-time. You won’t have to pay interest on a loan, and you could discover a new stream of consistent revenue.

6. Negotiate with your creditors

At the end of the day, your creditors want to get paid, and they may be willing to work with you to ensure that they do. Contact them and tell them you’re having trouble keeping up with your debt. They may help you create a repayment plan or extend your due date to ease your financial burden.

7. Get a loan from a bank or credit union

You may be able to take out a small loan with your banking institution. Credit unions especially are known for offering loans at great rates. Furthermore, they’re often more willing to look at additional approval factors besides finances when extending loans, such as how long you’ve held your account.

8. Seek credit counseling

A credit counselor, community assistance program or other nonprofit can help you create a budget and a debt repayment plan. The main benefit to credit counseling is solving the structural issues that led to your financial problems in the first place. You may even have enough savings right away that’ll help you avoid taking out a payday loan.

You can find a reputable credit counseling agency with the National Foundation for Credit Counseling.

Did you know? There's a free mobile app you can use to get cash you've earned today.

Earnin is a free mobile app that offers cash based on your paychecks and work schedule. Request up to $100 a day with an optional tip. Read our review.

Bottom line

When money is tight, the last thing you need is pressure to divert your hard-earned cash into paying excessive fees and services. Carefully explore your alternatives to make an informed decision on how to best handle your financial situation before taking out a payday loan.

Frequently asked questions

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and our Privacy Policy.

2 Responses

  1. Default Gravatar
    RoyalSeptember 6, 2017

    What options for a loan…Income retired expense. Senior City Housing

US Payday Loans Offers

Important Information*
Slam Dunk Loans

Potentially get approved for a short-term loan through this lender-connection service, even with poor credit history.

LendUp Payday Loans

LendUp offers $250 loans for first-time borrowers. Good credit is not required. Visit the site to see if available in your state.

Check into Cash Payday Loan

With 1,000 branches in 30 states, get $50 to $1,000 in days from this direct lender.

OppLoans Installment Loans

Installment loans with competitive rates from a top-rated direct lender.