Alternatives to Paycheck Advance Loans

When you need money to pay some unexpected bills, or if your work slowed down because of the economy reducing your take home pay, you may look into paycheck advance loans. It can temporarily offset the cash shortage, but it is  not the most cost effective. There are other alternatives. 

Collect From The Company

The first and most obvious is to see if the company you work for will make an advance on your paycheck. All companies create their payroll after the employee has completed the job; no one pays in advance. Technically, you are owed the money for your work. So it's really not an advance. Your employer is holding your money until it is convenient for him or her to pay everyone at the same time. It may be an inconvenience but it is worth the effort to try. Just don't insist; that may get you fired. 

Sell Heirlooms

For centuries, people have been selling heirlooms in order to convert what they don't want into cash. We buy things, use them until they become obsolete and then store them in an attic or garage. In some cases, they gain value and become heirlooms, but the majority just gathers dust. Since one person's junk is also another's treasure, it makes sense to have a quick garage sale and get rid of whatever you don't use. This will postpone any quick payday loan that you would only have to repay. 

Hock Jewelry

Selling heirlooms is one thing, but using them as collateral is something else. Granted you will not get nearly as much money for using a pawnbroker, but you will get ready cash. Just remember that there is a possibility of losing the heirloom altogether if you cannot afford to get it out of hock. But if you do, then it will be a good source for future cash shortages. 

Use Credit Cards

This is really a last resort. The credit card companies make it easy for you to borrow money by offering check-writing options. Instead of paying a fee to get a paycheck advance loan, you pay a fee to the credit card company that is around 3%. There is also interest that has to be considered. You will be paying interest for a long time if the check you write adds to your outstanding balance. The problem with this alternative is that the higher your outstanding balance as a percentage of your credit line, the lower your credits score. A lower score makes it more difficult to borrow in the future. 

Friends and Family

This is a last, last resort. It's also the least expensive in terms of interest. Relatives are always good for a loan, but the cost could be humiliating. Holding a loan over your head for a few hundred dollars may not be the position in which you want to see yourself. Of course, if you did use family for a quick loan, by all means, make sure it is repaid quickly; unless, of course, you no longer want them as a relative or friend. 

There are other alternative to paycheck advance loans that help those in need of short-term cash flow problems. Sometimes the alternative, however, may not be as practical or wise.

Seth Pincheon is a financial consultant who for many years advised business owners and professionals about credit choices and how to save money using some very unique methods. If you need paycheck advance loans