In Need of Cash? Here are 3 Alternatives to Payday Loans


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There are almost 50% of Americans right now that have little to no savings at all. Not only that, but almost 70% of Americans have less than $1,000 in their savings. Because of this, many resort to payday loans, especially those who are in a tight spot and have bad credit.

But did you know that there are quite a few alternatives that you can take instead of relying solely on payday loans? Of course, we all know the reputation that payday loans have, and most people see payday loans only as a last resort, which is pretty understandable.  While they can help with sudden financial needs, they can also be risky.

However, before we tackle the alternatives to payday loans, let’s discuss in-depth what they are first.

What are Payday Loans?

Payday loans are short-term cash loans. So how do they work? Typically, they are loans that depend on your next salary and require little to no credit check. Payday loans have a reputation of being predatory, often putting a lot of borrowers in a never-ending debt cycle. The main reason for this is because of its very high interest rate.

Now, some states have capped interest rates to a certain percentage. However, for some states with no interest rate cap, the interest rate can be astronomical. On top of having a high-interest rate, they are also quite a risk to take, especially if you don’t have a set salary.

When a borrower misses their payments, not only will their credit score take a hit, they would also be taking fees for the late payments. Now, imagine that you have to take payday loans because you have bad credit. Missing their payment would worsen your credit score and put you in a worse financial situation.

Some lending companies allow their borrowers to do rollovers. Rollovers mean that instead of liquidating your loan after maturing, they are transferred to another loan that you have to take, effectively creating a vicious cycle.

However, don’t get us wrong. Not all payday loan alternatives and the lenders that offer them are predatory. Most of the lenders you can find on the internet are reputable. The predatory lending companies that trick people are just a minority. Hence, it’s important to do enough research before taking one out.

Hence, you must check the background of a lender. It still pays to be cautious with every lender you come across. However, there are quite a few alternatives to payday loans. Here are some of them.

Bad Credit Loans

Bad credit loans are just like your typical conventional loan with minor differences. For example, if your credit score falls in the range of 580 to 669 according to FICO, you may qualify for a bad credit loan.

However, this doesn’t mean that you can get one right away, as there are some things that your lender still has to check. For example, some lenders only offer bad credit loans to qualified individuals if they have a cosigner.

In addition to checking your credit score, they would still check your income, DTI, and credit history. And even if you can take the loan, the interest rate would be higher than average, but it’s better than payday loans.

Credit Union

If you’re already part of a credit union, then you’re in luck. Credit unions are nonprofit and are run by the members themselves. This means that you’d be able to get cheaper loans that you can benefit from.

However, some credit unions only allow members to take a loan if they have been with the union for some time or if they already have a significant contribution to the union. If you’re qualified, their requirements aren’t too strict, unlike banks and lenders. Also, some unions even don’t mind if your credit is less than stellar.

Employer Salary Advance Schemes

Some organizations offer their employees the opportunity to access some of their future salaries or wages before they are paid. It’s like a cash advance of some sort, but it’s taken off your next salary.

If your employer belongs to an ESAS, then it’s a good way to mitigate some financial issues. you’ll have that crop up in between your salary. However, be mindful since you’re taking it from your next salary, which means that you’ll have a reduced salary on your next payday.


If you’re looking for payday loans within South Carolina, chances are you’ll see a lot of them from reputable lenders. However, there are actually quite a few alternatives to payday loans if you just know where to look. However, each of the alternatives listed above has its pros and cons, so you have to pick the most suited for your financial situation. All in all, make payday loans the last resort if you can.