Cash Advance Alternatives to Payday Loans Online

What do you do when you need to borrow money with bad credit? Most financial advisors will tell you not to do it. But sometimes, it’s impossible to follow this advice, even though you wish you could. 

Maybe your dog finds your stash of chocolate, and you don’t have any savings set aside for a surprise vet visit. Or perhaps one of your window casings starts to drip water, and you need a roofer to come out for a quick fix. 

Online payday loans are short term loans that are marketed as bad credit loans, but they can charge a triple-digit APR for the privilege. These short term personal loans are also usually due within two weeks—or whenever you get your next paycheck. 

Could you pay back a loan with a high APR by then? Don’t worry if the answer is no, you can apply for a cash advance online with bad credit without borrowing a payday loan. 

Why Are Online Payday Loans Popular?

People borrow payday loans online because they’re convenient. Unlike some of the biggest banks and online direct lenders, they won’t turn you away because of subprime credit. 

In fact, some online payday loans direct lenders won’t even check your credit at all. These payday loans online direct lenders only look at your income to see if you can reasonably afford their funding. 

With the threat of rejection from other lenders, this guarantee can make payday cash advances seem like a good idea.

Are There Legitimate Payday Loans Online No Credit Check?

A credit check is a normal and necessary part of the borrowing process. This check tells a lender a lot about a borrower. It reveals all your past installment loans and lines of credit previously reported to a credit union. They’ll see how much you borrowed, whether you paid on time, and how often you carried over a balance if applicable. 

As a snapshot of your borrowing behavior, a credit check allows a lender to assume (within reason) how well you’ll handle their funds if they lend you money. 

When a lender doesn’t check this information — like those advertising short term personal loans with no credit check — it indicates they don’t care whether you can handle their payday cash advance. In fact, they’re hoping you will run into some challenges. That way, they can charge you late fees and other charges when you roll over your loan.

What is Rolling Over a Loan?

A roll over happens when you can’t repay a cash advance in one lump sum by the due date. 

In this situation, many payday lenders will get you to pay the outstanding interest and a late penalty, and they’ll extend your original loan for another two weeks. There’s also a good chance they will increase your rate, so you’ll accrue even more interest. 

This might give you enough time to get back on your feet. But for most people, it jumpstarts a cycle of debt where they constantly push out their due date until they pay more in fees than the original loan. 

What’s the Alternative?

Finally, the answer to the question of the hour. If you can’t handle the upfront repayment style of an online payday loan, consider installment loans instead. Installment loans can be just as expensive depending on your lender. However, they come with extended terms to give you more time to repay what you owe.

As online loans with monthly installments, these cash advances break up your amount owing over several payments. Each payment will be less than the original loan, so it will take up less of each paycheck. 

While this might not work with every budget, it may be easier to handle than one lump sum. Keep this in mind if you need to borrow with bad credit.

Thomas Editing

Tommy Wyher is the founder of Husky Marketing, a digital marketing and content creation company. Wyher has worked with a number of Fortune 500 companies