9 Ways to Avoid Applying for a Pay Day Loan

Pay day loans are popular among consumers in need of short-term cash, but these loans often come with high interest rates and hidden fees that can make the loan more expensive than expected.

In order to avoid paying for your pay day loan, use these tips instead to get the money you need without breaking the bank in the process.

If you’re considering getting a pay day loan, review these tips first before taking out one of these loans.

1) Have an Emergency Fund

The best way to avoid paying for a pay day loan is by having an emergency fund. The emergency fund should have six months worth of living expenses, but can be as much as two years worth of living expenses if you don’t have stable employment.

The emergency fund will help you through the tough times and allow you to avoid taking out loans or using your credit cards.

If you are not in debt, cut out non-essential spending like eating out, vacations, clothes shopping, etc.

These things add up over time and make it hard to stay out of debt. Make Sure Your Income Is Enough To Cover Your Bills:

An important factor when deciding whether or not to take on any new financial obligations is making sure your income is enough to cover your monthly bills.

Sometimes people need to cut back on what they spend their money on and what luxuries they are able to live without so that they can afford their monthly payments.

2 ) Get a Part-Time Job


One way to avoid paying for a pay day loan is by getting a part-time job.

You can apply at stores, restaurants, schools, and many other places where you might see an Employment or Help Wanted sign.

If you work more hours, you’ll have more money in your pocket without having to deal with the interest rates and fees of a payday loan.

If you’re not working full-time, consider picking up some shifts here and there to make some extra cash.

Unnecessary spending should be avoided because it costs money but provides no reward.

Cutting down on this type of behavior will give you more room in your budget so that it’s easier to afford what’s really important.

3 ) Do a Side Hustle

A side hustle can help you make enough money to cover expenses until your next paycheck comes in.

It could be as simple as picking up an extra shift at work or doing some freelance work on the side, or it might be starting your own business.

You just need to figure out how much time and effort you’re willing to put into it.

✓ Sell Some of Your Stuff: If there’s anything that has been collecting dust, why not sell it?

✓ Carpool: If you live near people who commute along the same route as you, carpooling is a great way to save on gas and wear and tear on your vehicle.

Or if you don’t want to rely on other people’s schedules, try using an app like Waze, which lets you find the cheapest route based on current traffic conditions.

✓ One such program is Qualifying Low Income Home Energy Assistance Program (QLIHEAP) which provides financial assistance to low income households with high energy costs.

4 ) Make a Budget

It’s important to be able to track your spending so you know how much money you have left at the end of the month.

It’ll also help you figure out how much extra money you need in order to cover necessities.

Here are some tips on making a budget

✓ Write down all the income you bring in, including earnings from work, and any other income like child support or alimony.

✓ Write down all the fixed expenses (i.e., rent, mortgage payments).

✓ List all variable expenses (i.e., food, gas), and make sure they’re broken up into categories like groceries and gas by week or month if possible.

✓ Now subtract your total monthly expenses from your total monthly income. If it is positive, then you should put this amount away in savings each month.

If it is negative, you may need to start thinking about ways to save more or cut back on expenses.

5 ) Borrow From Friends or Family

If you don’t want to pay for a payday loan, first ask your friends or family if they would be willing to lend you the money.

If none of them are in the position to do so, then maybe it would be worth talking to your bank and asking about an overdraft protection plan.

Most banks will allow you to borrow up to $1000 dollars at a time without charging any interest.

However, this option is only available when your account balance is below $0 and there are sufficient funds in the account.

Another alternative would be borrowing from yourself by using retirement savings like IRA accounts or 401k plans.

The caveat here is that you may have tax consequences if not done properly (read more).

You can also avoid paying for a payday loan by taking out a small personal loan from your credit union or community bank.

For instance, State Employees Credit Union offers loans between $2000-$5000 with fixed rates as low as 3.45%.

It’s important to note that these loans require collateral and should be taken out responsibly; otherwise, there might be excessive costs associated with defaulting on the loan.

6 ) Try a Personal Loan

If you are looking for an alternative to a payday loan, consider getting a personal loan.

Personal loans can be paid over time, giving you the opportunity to create enough income and pay off the debt.

They also have lower interest rates and fees than payday loans, which means less of your hard-earned money is spent on interest.

You will still need to provide some type of collateral, like a car or house in order to get approved.

Some companies will let you use your future paycheck as collateral instead of actual property.

These loans may have higher interest rates and there is usually a limit to how much you can borrow from this type of company.

For example, if someone owes $500 they could borrow $1,000 from this type of company.

A signature loan would be another option.

These types of loans allow borrowers to borrow up to $5,000 without providing any collateral.

The catch with these types of loans is that they charge extremely high rates because there’s no risk for the lender when lending out that amount of money.

Written by Dallas

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