Alternatives to Payday Loans

Alternatives to Payday Loans

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If you are considering taking out a payday loan it is first best to look at all available options open to you for credit and other financial products. Many people need financial assistance for a short period of time, and payday loans are often seen as an ideal option, as they provide you with a fast, simple way to access funds that will resolve a problem and allow you some breathing space until your next pay day. There has been a vast improvement in payday loans over the course of the last few years, as reputable and responsible lenders have entered the arena, changing the perception of payday loans and ensuring that those who have applied for credit understand exactly how much they owe, including all interest and fees, and have a flexible option should financial circumstances change.

There are a few cases where an alternative to payday loans is the right answer for your own personal financial circumstances. It should never be sought out if it will mean you are placed in potentially worse financial situations in the near future, through failure to pay or missed payment dates.

If you are borrowing money to pay for everyday essentials, such as to pay regular household bills, your rent or mortgage, or to pay back personal loans you have taken out from friends and family members, a payday loan is certainly not the right option for you. In these cases you should seek out a debt advisor, someone who can help you put together a strict budget to live on, prioritising your debts and helping you to set up payment plans to cover each individual debt.

Other options for borrowing include asking your employer for an advance on your pay. This should only be asked in extreme circumstances, but it is worth asking rather than putting yourself in greater financial risk through a financial product or service (if you believe you will be unable to make repayments). Borrowing from friends and family is also an option, although there are risks attached here to the relationship you have with those you have borrowed from and can also be legally challenging if you fall out, or fail to pay back the money.

Credit cards, store cards and bank overdrafts are all alternatives to taking out a payday loan. With each of these always be very careful to read the small print and understand the fees and interest attached. You will likely be given an interest free period, but once this is over the fees can be significantly higher than you are used to paying.

If you have taken a look at all available options open to you in order to help you through a short-term financial crisis, or other reason for seeking credit, and you think that a payday loan is the best option for you, then great. Always be aware that you should conduct thorough research prior to agreeing to take out any financial product or service, read the small print and choose a lender that can provide clear credentials and a track record of transparency and success in helping those like you, who require financial help only for a few short weeks or months. Most payday loan lenders provide loans ranging from £50 up to £10,000 for a period that can range between one week to 3-months, with clear fees and interest laid out prior to the loan being awarded.

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