Three-month payday loans are not the only option out there when it comes to short-term finance. If you need cash quickly, they can be a tempting option, but sometimes these alternatives might be cheaper:
Credit card: Many credit cards offer 0% finance promotions for the first 3 to 6 months, and some offer 0% finance forever as long as you pay it off in full every month. Unlike a short-term loan, you won’t be able to get cash from a credit card unless you pay for a cash advance. However, credit cards will always have a lower interest rate than three-month payday loans.
Credit unions: Credit unions are community loan providers. They are often small non-profit organisations that help local communities. More than 300 credit unions in the UK often work out much cheaper than short-term loans from payday lenders. Credit unions have a cap on the amount of interest they can charge, and currently, this is 3%, which is far less than payday loan rates.
Overdrafts: The majority of banks will provide the option to add an authorised overdraft to your account. They will still charge some interest, but they are often cheaper than three-month payday loans if you stay within your authorised limit. Always avoid unauthorised overdrafts because they can come with additional charges, making them difficult to get out of.
6