Teaching Kids to Be Responsible with Money

What Are Some Alternatives To A Cash Payday Loan?

by Ian Wallace

If you've recently fallen behind on your bills due to a brief stint of unemployment or a large unexpected expense, you may be looking for ways to cover your expenses without dipping into your 401(k) account or racking up credit card interest rates on a high balance. However, you may not have any desire for actual cash you'll just need to deposit in your bank account to cover your bills (and risk loss or theft along the way). You may also be leery of paying high interest rates, even if they're assessed over a short-term loan. What can you do to have funds directly wired to your bank account without paying an arm and a leg in interest? Read on to learn more about your non-cash and low-fee payday advance options.

Online paycheck advance

Many payday lenders offer a free (and instant) ACH transfer in lieu of cash. Not only can these funds be available immediately upon approval of the loan, you'll be able to apply online -- uploading a photo of your last paystub or other documentation of your income and providing your bank account information, then receiving funds with the click of a button. After your loan period ends, the payday lender can then use your bank account information to retrieve the funds and any service fee charged. You'll need to make sure you have enough in your checking account to cover the loan repayment and service fee (or make arrangements to extend the loan until your cash flow has improved).

Instant pay service

One recent innovation in the world of payday advance apps is a way to instantly get the amount of pay you've earned since your last paycheck. Unlike traditional payday advance loans, which lend you a certain amount of money based on your projected salary over the next few weeks or months, these apps will front you only the amount you've currently earned -- lowering both their risk and your interest rate. For example, if you earn $800 biweekly and need $350 by the Friday between paychecks to make your mortgage payment, you should be able to use one of these services to get at least the $400 you've earned by the end of that work day. Like other paycheck advance services, this money can be wired directly into your account and then withdrawn as soon as your paycheck is deposited. Because the amount you'll be getting is always going to be less than the amount of your paycheck, you also won't need to worry about overdrawing your account.