Alternatives to payday loans

Many believe that payday loans are the only option for consumers with bad credit, but other options do exist and most financial counselors would direct people to explore the alternatives. Other options are available to most payday loan customers. These include pawnbrokers, credit union loans with lower interest and more stringent terms, credit payment plans, paycheck cash advances from employers, bank overdraft protection, cash advances from credit cards, emergency community assistance plans, small consumer loans and direct loans from family or friends.
Payday lenders do not compare their interest rates to those of mainstream lenders. Instead, they compare their fees to the overdraft, late payment, and penalty fees that will be incurred if the customer is unable to secure any credit whatsoever.
The lenders therefore list a different set of alternatives (costs expressed here as APRs for two-week terms):[citation needed]
* $100 payday advance with $15 fee = 391% APR;
* $100 bounced check with $48 NSF/merchant fees = 1,251% APR;
* $100 credit card balance with $26 late fee = 678% APR;
* $100 utility bill with $50 late/reconnect fees = 1,304% APR.