When you are in financial difficulty, a payday loan can be a lifesaver to cover your essential living expenses or emergency bills. Payday loans are often easy to get, with some lenders offering an instant cash advance to borrowers with bad credit. However, because of the risks associated with taking payday loans, as well as the inherent high interest rates, financial experts have suggested that borrowers should avoid this type of loan.
In fact, payday loans are meant to be used as a last resort when you have exhausted all the alternatives available on the market. Thankfully, there are better, low cost alternatives to payday loans that people with a bad credit rating can access.
This post will walk you through the 5 best payday loan alternatives and also explain the best way to get a quick cash advance online to settle your unexpected expenses.
What Are Better Alternatives to Payday Loans?
#1. Payday Alternative Loan (PAL)
Payday Alternative Loans (PALs) are among the best payday loan alternatives you should first consider if you have a bad credit score. They are offered by different credit unions in the US. The loan you obtain from this funding source can be used to pay off an existing loan or allocated to settle unexpected expenses like medical emergency bills, vehicle maintenance cost, kitchen appliance repair costs, or to even fund your vacation abroad.
One of the benefits of accessing loans from a PAL is that their loans usually come with flexible repayment terms and lower interest rates. Additionally, you will enjoy more time to repay the loan compared to what payday loan lenders stipulate. To take out a loan from a PAL, a credit union may charge you an application fee up to $20. The loan amount you can take from a PAL can range from $200 to $2,000 to be repaid within 6 months.
With so many PALs operating within the United States, it can be difficult to choose a PAL to work with; therefore, it is important that you review the payday alternative loan market to choose the best one that suits your budget and creditworthiness.
#2. Bad Credit Personal Loan
If you have a bad credit score, it may be difficult for you to access instant cash advances from an online lender. However, lenders may consider you for a bad credit personal loan. The amount readily available for bad credit personal loan ranges between $500 and $10,000. While the APR and other charges may be high, it’s still a bit cheaper than taking a payday loan. Bad credit personal loans don’t require you to deposit your property as collateral unlike auto and home loans. They only require a soft credit check.
#3. Borrow From Family or Friends
Borrowing from a family member or close friends is another great way to access a quick loan to settle your debt or unexpected expenses. The biggest advantage that comes with taking out a loan from a family member or your close friends is that you won’t pay a high interest rate. In fact, some friends may decide to lend you the money with zero interest rate.
If you decide to take out a loan from your family or close friends, ensure you put the loan agreement in writing. The contract should include the collateral being used, the interest rate charged, the amount you intend to borrow, the repayment amount, as well as the due dates. Failure to repay the loan in record time will not hurt your credit, only that your friend or family member may institute a legal action against you, which will dent your relationship with the person.
#4. Lending Circles
Borrowers with bad credit can access quick loans with lending circles. Just like a credit union, lending circles are a group of people with like minds. They are a non-profit organization where members pull funds together to help themselves. As a member of a lending circle, you can take out a loan between $500 and $5,000. The loans can be used to purchase a car, renovate an old house, fund your vacation abroad, or pay your medical bills. The biggest advantage of taking out a loan through this source is that the interest rate is somewhat low, in some cases 5%.
#5. Peer-to-Peer Loans
Peer-to-peer loans are rapidly gaining traction as internet penetration deepens across the world. This type of loan is available through popular platforms like LendingClub and Prosper. The responsibility of these platforms is to pair borrowers with reliable creditors. The interest rate is usually between 7.95% and 35.99%, depending on a number of factors, including the loan amount and the repayment duration.
Keep in mind, however, that peer-to-peer lenders usually charge different fees based on the loan amount you intend to borrow. The lenders will also review your background and credit worthiness to determine whether or not you will be able to repay the loan in record time.
Best Way to Get Cash Advance Online
Taking out a loan to settle unexpected expenses can be overwhelming without the help of a loan broker. A loan broker like iPaydayLoans will not only make the process seamless for you, they will also match you with lenders that understand your financial needs and offer flexible repayment terms. Applying through iPaydayLoans is simple and straightforward; plus, you can complete the application process in less than 5 minutes. Apply Now! And receive funds within minutes.
Conclusion
Payday loans may be easy to get, but they come with stringent conditions and a higher interest rate. Borrowers should be ready to pay a steep price to enjoy the convenience. To avoid the high fee and other charges that lenders subject payday loan borrowers to, you can look towards any of the 5 best payday loan alternatives we have highlighted.
Before you apply for an alternative to a payday loan, ensure you check your credit score to know where you stand. Doing so will better help you narrow your loan options for fast approval.
