Need Emergency Cash? 5 Better Alternatives To Payday Loans

There’s no two ways about it; payday loans are a stupid idea for all but the most self-disciplined individual.

With their ridiculous interest rates – often topping 1000% – relying on payday loans can, in my opinion, actually lead to more financial problems than they actually solve.

Yes, you might get hold of the money you need in a hurry, but actually servicing that loan will cost you so much that it could take months to get your finances back on an even keel. If finances are so tight that you need to rely on a payday loan then the extra expense of paying off a new loan could have a serious impact on your monthly budget.

But if payday loans are such a bad idea, what are some suitable alternatives to payday loans when you really need to get your hands on some cash in a hurry?

Contact Your Existing Bank

Your current bank will have all your personal information, spending history and credit details.

Therefore your own bank can often be the quickest source of funds when you’re in a hurry.

Ring them up and discuss loans, overdrafts or credit cards and see what, if anything, they can offer you.

I’ve had situations in the past where an overdraft was set up within a matter of hours, allowing me to get out of a tight situation with the minimum of fuss.

While you’ll pay for these credit services with your bank, the rates are far lower than you’d pay on a payday loan which helps to make them a far smarter alternative.

Peer To Peer Loans

If you’d rather not use your bank – or have been previously declined for credit – then you might want to consider crowd-sourcing your loan requirements.

A number of websites now allow other people to lend you money through their software.

You’ll still undergo a credit check (important to know if you’re struggling financially) but the rates can be far lower than a payday loan.

Upgrade Your Phone

Cell phone companies are in a competitive business and want to keep your business as long as possible.

To do this, some companies offer financial incentives for either taking out a new contract or renewing an existing one.

Particularly if you decide to renew your contract, but opt not to take a new handset, you may find that your cell phone provider is willing to offer you a surprising sum of money just to sign another contract.

Alternatively they may be willing to give you a brand new handset worth several hundred dollars when you upgrade.

If your existing handset is still working fine, you can take this new handset, sell it on to a friend, and then keep using your current handset until another upgrade is due.

Move Bank Accounts

Banking is now so competitive that some banks will actually pay you to switch over to them from your existing bank. For example, at the time of writing, here in the UK both Halifax and First Direct will give you £100 just for switching your bank account.

Even better, they’re so desperate for your business that they’ll even do all the switching for you – moving across all your direct debits and so on. Best of all, the process only takes a matter of days, at which point you’ll find your new account furnished with your switching reward.

So if you need an alternative to payday loans consider looking around to see if any bank accounts are offering cash incentives for signing up right now.

Sell Your Stuff

We all have garages, lofts and closets full of old stuff that we no longer want. Listing these items on Ebay, Amazon, Craiglist or Gumtree can be a quick and painless way to quickly turn your unwanted junk into cash.

The only real requirement is that you’ll have enough time around work to actually ship off the bought items in a timely manner to ensure that you get the positive feedback that helps to strengthen your sellers profile.

Have you ever used a payday loan? What is a better alternative in your opinion? Please leave your thoughts in the comments section below…