Top 5 Payday Loan Alternatives For Emergencies

Did you know that payday lending is illegal in twelve states and has restrictions in eighteen states and Washington D.C.?

Even so, as many as 12 million Americans are estimated to take out a payday loan each year, as per the most recent CFPB data available.

Reasons being:

• Unprecedented medical emergencies
• Urgent bills or expenses that cannot be delayed
• Poor credit history
• Limited access to traditional credit options
• Sudden expenses incurred from emergencies
• Temporary income shortfall

When emergencies strike, many people often resort to payday loans, thinking it's their best or sole resource. However, this is not entirely true. In this blog, we'll delve into the reasons why payday loans may not be your best bet in desperate times. Furthermore, we'll explore the best alternatives to payday loans, like Credee’s flexible payment plans, to help you make an informed decision.

Why Payday Loans May Not Be the Best Option

• They are a quick fix with long-term financial consequences. 
• They typically have extremely high annual percentage rates, often exceeding 300%.
• Many payday loan borrowers find themselves trapped in a debt cycle.
• Certain payday lenders engage in predatory practices, targeting vulnerable or uninformed individuals.
• The short repayment period of these loans can pose repayment challenges for borrowers.

On average, one in five borrowers default on their payday loans.

Dire times call for dire measures unless there are alternatives. And, in this case, there are. Let's look at a few of them.

5 Alternatives to Payday Loans To Consider

1. Local Nonprofits and Charities

Before resorting to a payday loan as your last option, check your local directory for organizations that administer financial relief. Moreover, most communities have charities and not-for-profit organizations that offer financial assistance, such as rest and utility support and medical expenses coverage. Additionally, you can also access healthcare services from NGOs, provided that you qualify.

Ideal Alternative For: Individuals facing financial hardship who need immediate support from local community resources.

2. Medical Bill Assistance

If you experience a medical emergency, several healthcare providers may offer flexible payment plans. It takes the burden of paying a hefty amount at once off your shoulders. Additionally, it enables you to pay for your medical expenses over time, making them manageable. Look for providers near you that offer Credee's payment plans for an increased chance of approval. Bonus: Credee doesn’t do credit checks. Additionally, try working with a medical billing advocate or look into a medical credit card with interest-free promotional periods as an alternative to a payday loan.

Ideal Alternative For: Individuals dealing with unprecedented medical expenses, seeking manageable payment options.

3. Bad-Credit Online Loans

In situations where your credit score is low, consider a bad credit personal loan as an alternative to a payday loan. But be cautious. Even though bad-credit loans generally have lower interest rates than payday loans, it is still higher than a conventional loan. However, you'll have a year or longer to pay off a bad credit loan. Nevertheless, weigh in all the alternatives to payday loans before going for a bad credit loan.

Ideal Alternative For: Individuals with low credit scores looking for long-term solutions with lower interest rates than payday loans.

4. Credit Union Loans

Credit union loans pose a considerable alternative to payday loans. But you must be a member in good standing to apply. Moreover, they consider your credit score, income, and membership history when evaluating your application. If you're eligible for a credit union loan, you can borrow a small amount. It has a maximum interest rate of 28% and flexible repayment terms. However, remember that credit unions report loan payments to credit bureaus, affecting your credit score.

Ideal Alternative For: Credit Union members with good standing, requiring a small loan. 

5. Payment Plans

Another alternative to payday loans is payment plans, especially in times of medical emergencies. Many healthcare providers offer flexible payment plans through Credee to help patients manage their medical bills better. Moreover, it is an ideal alternative to payday loans for people worried about low credit scores. Credee has NO CREDIT CHECK policy and a 97% approval rate, which means providers can instantly approve most patients. So, look for providers offering Credee's flexible payment plans in your area before applying for a payday loan.

Ideal Alternative For: Individuals faced with medical emergencies looking for flexible payment options with instant approval and no credit checks.

Conclusion

Payday loans may seem like a quick fix during emergencies, but they bear significant risks and long-term financial consequences. Moreover, they are not the only way out of a crisis. Explore alternatives to payday loans, such as seeking support from charities, medical bill assistance, and Credee's flexible payment plans. 

Write to us to learn more about how Credee can help you!