Alternatives to Payday Loans

As a financial journalist, I've had the opportunity to report on the payday lending industry for many outlets. That's because it is *big business*.

In fact, Pew Research found that 12 million American adults spend more than $7 billion a year on payday loans.

And listen to this...

On average, a borrower takes out eight loans of $375 each per year; takes five months to pay it back; and pays $520 in interest and fees.

And, interestingly, it's not just low-income households finding the need for short-term financing.

Researchs from the Unversity of Georgia found that even some owners in the top 20% income bracket in the United States use payday loans.

Regardless of income level, the one thing that I've observed in every borrower I've met is that they believe these loans were their only choice. That's simply NOT TRUE!

The financial stress can make us forget that we have other options, like reducing expenses, negotiating lower interest rates from creditors, or that even a friend, family member or in some cases an employer might offer short-term loans.

There are also lower-cost borrowing alternatives like those offered by OneMain.

And there's a new company called "Honeybee," which offers 3-month loans of a week's pay for minimal cost.

Life happens. Unexpected bills can hit hard. The key is to find alternatives that allow you to create long-term financial security without getting caught in a destructive cycle of debt that is not consistent with who you are and what you want to achieve.