Payday loans can be a very expensive way to borrow money. Most people take a payday loan because they struggle to get credit elsewhere. If you need to take out credit you may want to consider the alternatives to payday loans.
If you’ve not got enough money to get by, taking out payday loans will only make this problem worse. The best solution is to get impartial debt help and a practical debt solution.
Credit unions are non-profit community-based organisations.
They can offer loans, savings and current accounts for their members’ benefit. People pay into the union to save or to borrow money if they need to. The idea is to encourage people to take control of their money, save what they can and borrow only what you they can afford to repay.
A credit union can be a way to access credit if you’re likely to be declined by the bank. Most credit unions lend small loans of £50 to £3,000.
You can search for your local credit union on the Association of British Credit Union’s website, or call 0800 015 3060.
If you’ve been on working age benefits for at least 26 weeks you may be able to get a budgeting loan to pay for essentials like rent, furniture or clothes. The smallest amount you can borrow is £100 and normally you’ll have two years to repay it. The money is paid straight into your bank account and is interest free. How much you get depends on your circumstances.
You can apply for a budgeting loan if you live in England, Wales or Scotland and Northern Ireland.
Rather than getting a payday loan it may be an option to ask the bank for a small overdraft limit. You’ll be charged interest on the amount you’ve borrowed until it’s repaid.
There may be an administration charge, an arrangement fee, and monthly fees.
The overdraft can also be taken away at any time, so if you do have an overdraft it’s crucial for you think how you’re going to repay it, how much it’ll cost and be certain you’ll won’t not exceed the limit.
If you’re regularly short of money borrowing more won’t help. We can provide free debt advice.
Online debt help
Get online debt help now with Debt Remedy – our online tool can recommend a solution to your debt problem.