Sometime when short on cash, payday loans seem to be the easiest way of getting some money. However, the payday loans are expensive and predatory because, on average, it can cost up to 400% in interest. You can avoid paying these high rates charged by payday lenders by considering alternatives that can lend you cash. Here are some alternatives
Loan schemes charging no interest
There are no interest lenders that provide small loans to consumers on a limited or low income. The advantage with this is that they do not charge any interest, which in the long run will save you some cash. The loan term is up to 18 months, and there are no monthly fees. Community organizations offer them, and anybody who meets the eligibility criteria can receive the loan.
Credit unions are potential alternatives to payday loans, and they are ideal for borrowing small loans. They can charge up to a maximum of 3% in interest rate, although others can charge less. Most of the credit unions have an alternative payday loan program that can bail you out when in need of cash. However, with a credit union, you will have to save first before getting a loan.
Taking an overdraft
If you need cash, you can consider an overdraft intended for lending in the short term. However, costs do vary with some lenders having daily fees, monthly charges, or some even charge interest or a combination. An overdraft is simple, cheaper, and fair compared to exploitative payday loans.
Other online lenders
Besides the payday loans, other sites can also provide online loans that could bail you. However, the challenge is they tend to charge interest rates of up to 35% to 40% or even higher. But compared to payday loans, they are not that exploitative.
Borrow from a relative or friend
The other alternative is to get a friend or relative to lend you some cash for you to pay back when your check arrives. This is the best alternative in terms of rates as well as good terms.