If you’re facing unexpected expenses such as medical bills, car repairs, or overdue rent, a payday loan might be a tempting solution. But beware — these are expensive loans that can trap you in a cycle of debt.
Payday loans are small, short-term loans that are meant to cover urgent expenses until your next paycheck. They offer quick access to cash, but they come with very high fees and interest rates. These loans are usually due in full within a few weeks and are often repaid with your pre-signed check, or by allowing the lender to withdraw money directly from your bank account. If a payday loan isn’t paid back on time, lenders may add extra fees or offer extensions, causing the amount you owe to grow quickly. The debt often becomes unmanageable.
When seeking emergency financial help, payday loans can be a risky option. The Federal Trade Commission (FTC) recommends lower-cost alternatives like credit union loans, payment plans with creditors or employers, or community assistance programs, and always reading the terms carefully before borrowing. Click the button below to explore more alternatives to payday loans. Click HERE to read more about payday loans
What can I do if I can’t repay my payday loan?
You deserve options that don’t make things worse. Let’s look at safer ways to get through a situation like this. Below are some possible alternatives to payday loans.
- Ask your creditors for more time to repay them.
- Try to get a loan from a credit union.
- Visit a community bank.
- Check with local branches of large banks in your area.
- Use your tax refund.
- Ask your employer for an advance.
- Get help managing debt with a credit counselor.
- Ask family and friends for help.
- Contact local charities and churches.
Click HERE for another resource on Nonprofit Credit Counseling and Debt Relief
