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Alternatives to Payday Loans

In times of financial hardship, many people seek payday loans as a way to get cash immediately. However, payday loans come with steep fees and an average annual percentage rate of around 400 percent. Although people usually seek payday loans as a quick-fix to an emergency, they can get hooked on the instant gratification the loan offers and get caught up in a cycle of relying on these loans when there are several other options that may be available to them.

Ask Your Employer for an Advance

Ask your employer about a paycheck advance. There is a possibility that you may be able to get your paycheck early if you are experiencing financial hardship. Since a paycheck advance isn't a loan, you won't be faced with any fees or interest charges. There is certainly no guarantee that your place of employment will be willing or able to offer a paycheck advance, and it is not something to ask for each pay cycle, but it times of temporary hardship, it can't hurt to ask.

Talk to Friends of Family about a Loan

If you feel uncomfortable asking your employer for an advance, consider reaching out to friends or family who may be in a financial position to help you out. Getting a loan from friends or family does not require a credit check, they will likely be much more flexible with repayment terms and they may not even charge you any interest.

Traditional Bank Loans

For some people, asking friends or family for financial assistance can be a difficult or embarrassing experience. If this is the case, you may want to consider a more traditional loan process. Check with your financial institution to see if they can approve you for a small-dollar loan. These types of loans are often linked to a mandatory savings account, so if you borrow $500, 15 percent of that will be deposited into savings and cannot be touched until the loans is payed back. With a small-dollar loan, not only will you get the cash you need up front, but it will also help you to establish some much-needed savings.

Seek Debt Management Advice from Professionals

If you are in need of immediate financial assistance and are considering turning to a payday loan, you likely have serious financial problems on your hands or will in the near future. Working with a non-profit credit counseling agency like Advantage CCS can help you get your finances under control. We can help you learn to plan and stick to a budget and manage your debt. We can also work with your creditors to help lower your payments and work out a monthly schedule that won't leave you under water.

Advantage CCS counselors an offer information and support on debt reduction, debt management, budgeting and more to put you on the right track to establishing financial security without having to resort to a payday loan. Our counselors are available online, via phone or in person. contact us today for more information on our programs.