While payday loans are convenient and accessible anytime and anywhere (due to the online application process set by lenders), payday loans may still not be the best choice for you based on your current financial standing. The following loan product and solutions are the top alternatives to taking out payday loans.
Centrelink advance payment
If you need cash to fulfil your current financial needs, you may apply for an advanced payment of your Centrelink benefits such as Family Tax Benefits or income support. If you are currently receiving Centrelink payments and other similar government benefits, you may qualify for the advance payment benefit free of interest or fees. You can send your application through the Service Australia website.
Credit cards are an excellent financial alternative to payday loans if you need to cover any unexpected bills during a difficult time. The advantage of using credit cards is that it provides the user with an open line of credit. Users will not be compelled to submit applications every time they need to take out extra cash.
However, if you fail to pay off all amounts due every month, you are exposing yourself to costly interest rates that can go up as high as 22% annual percentage rate. Credit cards may also include annual or monthly service charges.
If you need to cover for an immediate financial need, you may rely on overdrafts on your current loan accounts. This will help you conveniently address financial gaps without having to apply for another loan. Once you pay it off, it will still be available for you as an additional means to address future emergency expenditures.
However, this is not a guaranteed financial means to address financial shortages since you need to have a positive relationship with your lender or bank to get an overdraft. You should also have an excellent credit rating to prevent yourself from being turned down by the bank.