Payday loan alternatives

Besides payday loans there are other ways for consumers to get fast cash. These options include pawnbrokers, special credit union loans (that usually have strict terms but lower interest), credit payment plans, employer paycheck cash advances, credit card cash advance, bank overdraft protection, emergency community assistance plans, small short-term consumer loans and direct help from friends and family. You might want to check if any of the mentioned options apply to you before going with a payday loan – sometimes they can give you a better interest or less stringent terms.

Payday loan variations

Some mainstream commercial banks also offer something similar to payday loans: special advances on funds that are deposited electronically into their accounts. The conditions here are pretty similar to those you have with a typical payday loan, when you receive predetermined cash credit that can be withdrawn immediately. When the next sum of money is deposited into the account, the amount and the fee are deducted (which is usually about 10 percent of the borrowed sum). Not all banks offer such options, because it’s solely voluntary and some states lack such services in general.

Another option is an income tax refund anticipation loan. These loans are not quite payday loans, because they are based on the borrower’s tax refund, not paycheck, but in essence they are quite similar to payday loans concerning the terms and conditions. There are also car title loans available, which are secured by the borrower’s car, but the main condition of such a loan is a clear title (no other loans) to the car. The amount of money available through such a loan is typically a fraction of th actual resale value of the vehicle. Car title loans usually offer better conditions and lower rates because they have a lower degree of risk to the lender. In case the borrower is unable to pay off the loan, the lender can reimburse his money by selling the car.