The Borrower's Guide to Short-term Payday Loan Alternatives
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Alternative to Payday Loans

Educating Consumers About Payday Loan Alternatives

Payday loans are a fast way to access cash, but must be used responsibly and only for the short term. Several alternative varieties of short term loans can provide borrowers with a more affordable way to restructure their finances and pay off debts.



The most common use for a payday loan is financing ordinary living expenses. In fact, these recurring expenses are what 69% of first time borrowers list as their reason for applying for a payday loan. Groceries, rent, gas for the car, and child care can quickly add up. A borrower needing a fast and simple solution may end up choosing a payday loan because payday lenders rarely check credit history and offer speedy approval. However, this quick solution is only a temporary fix to a bigger problem. Payday loans are proven to be a high risk choice and almost half of payday loan borrowers default within 2 years. Luckily, a short term loan is an alternative to a payday loan that provides similar services but with more favorable terms. Plus, the online short term loan market allows consumers to shop around. This allows consumers to choose the most affordable loan. Whether you need a short term loan to finance utilities, an emergency, healthcare, rent, education, transportation, or to cover ordinary living expenses, finding a low cost payday loan alternative can provide extra cash and get you out of a tight spot.

As previously stated, if you are considering applying for a short term loan, it is recommended to browse different short term loan products and carefully weigh the pros and cons of each loan provider's terms and rates. Maybe one creditor offered a loan estimate with a lower interest rate but high late payment fees. Possibly another loan offer included a lower monthly payment but longer terms which made the overall loan cost higher. Also, keep in mind the benefits of only applying for credit from lenders who do a 'soft pull'. This soft inquiry checks your credit score without negatively impacting the borrower's credit. Spending time calculating total loan costs and finding the best deal could save money that can be put into savings or be used to pay other bills.

Payday Alternative FAQs

Most Common Questions about Payday Loan Alternatives

What is a payday loan?

A payday loan is a small dollar loan that allows borrowers to obtain cash on short notice. Sometimes, these loans are referred to as "short term loans," as the loans are usually for a short duration (until the borrower's next payday).

What are payday loan alternatives?

A payday loan alternative is an online loan option for millions of consumers who need to get fast access to cash before their next payday.

As a borrower with bad credit, can I get a payday loan alternative?

Borrowers with bad credit can apply for a short term loan. The interest rates and terms will vary depending on your credit score.