People who take out a payday loan expect it to be a one-time thing. They take out the $250 fully intending to pay it back in two weeks, or less. However, the average payday loan customer is in debt for five months and pays $520 in interest (on top of the original loan amount), according to research from Pew Charitable Trusts.
When an emergency arises, you may need to get your hands on cash in a hurry, but there are far less expensive ways of borrowing.
Sell or pawn things you no longer need
You can use eBay or Craiglist to sell off household items you don't need anymore. It's worth the sacrifice to sell things you may not have a strong personal attachment to, like a pool table or grill. Some items can be taken to the pawn shop for a quick sale. Or, have a yard sale to unload multiple items at one time.
Talk to your creditors about extending your due dateWhen you know you won't be able to make your payment, call your creditor and let them know. Many will allow extend your due date without charging a late fee or reporting you to the credit bureau. Do the same with utility or phone services.
Work some overtimeIf your employer allows it, work a few extra hours to get some overtime pay.
Get a side jobIf you have a hobby or skill that's in demand, offer your services to people in exchange for money. Erin Huffstetler, Guide to Frugal Living, has an extensive list of hobbies that earn money.
Ask your employer for an advanceIn effect, this is the same thing as a payday loan, but without the excessive fees and loan trap. Talk to someone in your human resource department about an advance on your next paycheck. Keep in mind that getting an advance will lower your next paycheck. Some employers even give loans that can be repaid in increments over multiple pay periods, lessening the effect on your take-home pay.
Adjust your tax withholding
Having extra money withheld from your paycheck so you can get a bigger tax refund is a bad idea when you're struggling to make ends meet. The IRS website has a tax withholding calculator you can use to figure out how much tax should be taken out of your paychecks. Be careful to make sure you're getting enough taxes withheld, otherwise you'll end up owing taxes next April.Tweak Your Income Tax Withholding, About Financial Planning
Cut out some of your bills
Read how to Get Money to Get out of Debt, for some ideas on ways to decrease your monthly expenses. Doing some of those things can give you a quick boost in your income this month.