Payday loans are very expensive, we all know that. But don’t worry, there are good borrowing options even for people with poor credit. Some payday lenders offer loans at reasonable rates, while other apps that are not strictly payday loan apps can offer you more or less the same borrowing experience. You can even get an advance on your salary free of charge.
We know that it can sometimes be difficult to qualify for traditional loans from banks, but that does not mean that you need to resort to a payday loan at extortionate rates. Let’s take a look at your options.
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Think the only route to getting cash quickly is a payday lender? Think again. We’ve looked at some of the best apps for borrowing. You may not be able to get money on the same day but for most people that is not too much of a problem. Plus, many of the lenders below will still lend to you even if you have poor credit, all without costing you an arm and a leg.
PockBox.com app. Check out PockBox if you need a smaller loan of $2,500 or less. In fact, you can borrow as little as $100 with the PockBox app which is great if you need just a little bit of help. Apply at PockBox.com and you are automatically connected to a selection of 50 online and offline lenders. This makes it easier to find a lender that will approve you for a loan.
LoanSolo app. Similar to PockBox but with a higher minimum loan limit of $500, LoanSolo also connects you to a range of lenders to help you find a good deal. You can borrow up to $3,000 with LoanSolo and the provider can help you get a loan as soon as the next business day. Just like payday lenders, LoanSolo will consider your application even if there are some hiccups in your credit history.
Avant app. Ideal for larger loans, the Avant app can help you with as much as $35,000. You can get low APRs with Avant too, as low as 9.95% APR in fact. However, Avant requires that you have a credit score of at least 580, higher than the requirements of most payday lenders. That said many people who are in need of a payday loan have average credit scores and fo them a loan from Avant will be a solid option.Prosper app. Prosper is not really in the league of payday lenders, it offers large loans at very low APRs and will only approve applicants with good credit scores. However, we want to highlight the provider because Prosper offers very good deals, with APRs as low as 5.99%. Sometimes it is worth trying to do whatever you can to postpone payments long enough to get approved for a low APR loan from a provider such as Prosper.
LendUp app. The LendUp app works a lot like a payday lender. You can borrow smaller amounts with LendUp, typically $100 to $250. Repayment is due within 14 days which doesn’t give you a lot of time to repay your loan, but this could be just fine for many people. Note the high APRs at LendUp, easily over 400% APR which is without a doubt in payday loan territory. However, you don’t need a good credit history to borrow from LendUp, which is a plus.LendingClub app. Like Avant, LendingClub offers larger loans with the minimum loan size set at $1,000. On the flipside, you can borrow up to $40,000 with LendingClub. Note that you will pay an origination fee with LendingClub which can be as much as 6% of the borrowed amount. However, if you need a large loan over a long term, consider LendingClub as an option.
People are often short of cash just before their weekly or monthly pay is deposited. That’s why payday loans are called payday loans: it is a loan issued just before your pay day, granted on the premise that you can repay the loan as soon as you get paid.
But payday loans are not the only way to get an advance on your salary. Here we highlight two apps that can help you get an advance on your pay. Both are much cheaper options than a payday loan.
Earnin app. Like the idea of getting an advance on your paycheck free of charge? Check out Earnin, a great solution if you can connect it to your employer’s wage system. Earnin lets you get an advance of up to $500 on your paycheck and there’s no interest due. Earnin simply deducts the amount advanced to you as soon as you get paid.
Dave App. Another way to get paid early and avoid payday loans, Dave offers very small loans. And that’s fine, sometimes all you need is $25 or $75 to tide you over until you get paid. Like Earnin, Dave does not charge interest but you need to pay a monthly subscription fee of $1 to get access to Dave’s features, including the ability to borrow.
This article covered a lot of payday loan alternatives, from providers that act pretty much just like payday lenders to apps that give you an advance on your salary completely free of charge. We like the free of charge option, and Earnin is the only app that charges no fees whatsoever.
Earnin is really simple to use, you just need to link it to your checking account and provide a copy of your paystub or salary slip. You can do it all using your phone, you can download an Android Earnin app or an iOS Earnin app if you have an iPhone. Once you are signed up you just launch the app to request a loan.
What’s great about Earnin:
- Loans are free on Earnin, you are not charged interest when borrowing from Earnin and you won’t pay any fees
- The app makes its money via tips, and tipping is entirely optional
- Repayment is automatic, Earnin simply debits your bank account when your loan is due
- Earnin monitors your income and expenses and will never let you borrow more than you can afford to repay
Points to note about Earnin:
- New Earnin members can borrow a maximum of $100 at a time
- Mostly people can sign up to Earnin, but not everyone can – it depends on your employer and how you get paid
- Getting verified with Earnin can take a few days, so it is worth signing up to Earnin even if you do not need to borrow immediately: that way you have access to Earnin when you need it
We think Earnin is a good alternative to payday loans. But Earnin should be used sparingly as it is easy to fall into the trap of borrowing money every month. Yes, you can borrow for free with Earnin, but you should never get into a habit of relying on loans to get you through the month. But how do you stay out of the payday loan trap? Here are a few ideas.
- Keep a budget. If you have a predictable income you should be able to keep a monthly or weekly budget. Look at your income and expenditure and ensure you don’t spend more than you earn. Your budget should allow for unexpected expenses too.
- Maintain an emergency fund. The best way to stay out of short-term debt is to maintain a savings account with a little bit of money in it. Keep $500 on the side in case you experience an emergency, such as an urgent travel expense or a washing machine that breaks. You don’t need to put your entire emergency fund aside in one month, you can build a fund by saving just $25 or $50 every month.
- Consolidate your debt. Many people struggle to get through the month because of debt repayments. Often these repayments include a large interest component. Consider taking out a large loan at a lower interest rate to pay off smaller, high-interest loans. Always remember that the key to making debt consolidation work is to not take out new loans once you’ve consolidated your debt.
Despite the best advice in the world it can still be difficult to avoid a pressing financial situation. If you know you simply will not make it through the month you can consider a loan to avoid overdraft fees.
Many of the apps we mentioned will provide you with a loan that will cost you less than the multiple overdraft fees your bank will charge you. This is because every transaction applied to an account with insufficient funds will incur an overdraft fee. That can lead to a lot of overdraft fees charged just for shopping with your debit card.
Lending apps, like the ones we cover in this article, can help you to avoid overdraft fees. Though payday loan apps are expensive you may want to consider obtaining a payday loan or preferably another, cheaper loan to prevent your checking account from going overdrawn. For many people even a high APR loan will be cheaper than several, repeated overdraft charges.