Interest rates for payday loans are shockingly high, with the national average annual percentage rate being almost 400%. If you’re one of the many Americans faced with the problem of having to raise some fast cash, make getting a payday loan your last resort. There are plenty of other things you can try first. Start by reading these five tips below.

1. Generate Extra Income

One of the best ways to deal with a lack of funds is to try to earn some more. Believe it or not, earning a little bit of extra income isn’t that difficult – it just requires some effort. You could start by trying to sell your old stuff or hosting a garage sale. 

For a steady stream of extra income, consider getting a part-time job that utilizes your skills. If you’re handy around the home, why not offer your services to your neighbours? Mow people’s lawns, offer dog walking, bake cakes and sell them, or try getting a freelance gig through Fiverr or Upwork.

2. Make Immediate Savings

Go through your bank account with a fine toothcomb. Look for areas in which you could save. Be harsh with yourself – don’t spend on things you don’t need. Canceling your TV package is going to be a sacrifice of course, but it’s better than getting a payday loan and paying all that interest.

Eat the food in your cupboards before you go shopping again. Shop around to get the best deals on your phone bill and utilities. Walk everywhere you can to avoid topping your car up with fuel. And all the time you make these savings, be thinking of additional ways to give yourself some breathing space from payday loans.

3. Reduce Your Chances of Overdrafting

Overdrafting leads to expensive bank fees. You can pay around $35 for each time you overdraft, and if you end up overdrafting a few times in one day, you could end up with a whole heap of bank charges. That’s enough to make anyone desperate enough to consider a payday loan!

You can potentially avoid overdrafting by opting out of overdraft coverage with your bank. That way, any one-time debit purchases or ATM withdrawals will be declined (although other transactions may still be processed). 

Alternatively, look for an app that alerts you when your balance is low so you can take action to avoid overdrafting. Read more about overdraft apps.

4. Ask for an Advance on Your Paycheck

If you’re really struggling, ask your employer whether you can have an advance on your paycheck to see you through until payday. If you don’t ask, you don’t get! If your employer agrees, you’ll be able to access your money early without any interest fees to worry about.

5. Consider a 0% or Low-interest Credit Card

If all else fails and you need to borrow money, a payday loan should be your last port of call. Providing your credit score allows, see if you can get a credit card that offers 0% APR on purchases and balance transfers for a time. If that’s not an option, try applying for a low-cost loan instead.

You could also think about asking a friend or family member for a short-term loan. It’s not an easy ask, as if things go wrong, you can damage your relationship with that person. You must be sure that you’ll be able to repay the loan back eventually before you proceed down this route.

Avoid a Payday Loan if You Possibly Can

Around 12 million Americans take out a payday loan each year, and those people aren’t exactly earning peanuts. Most borrowers earn around $30K a year, with 58% of them struggling to meet basic monthly expenses.

So living paycheck to paycheck is clearly a common occurrence for lots of people. If this sounds like you, and you want to break that cycle, the first few tips highlighted above can help you make some positive, lasting changes to your finances.

If, after doing those things, you still need to borrow money, put the payday loan option on the back burner until you’ve exhausted all other avenues. Try asking your employer for an advance, and if that fails, look for other ways to borrow money that don’t involve astronomical rates of interest.

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