A payday loan generally describes a short-term, high-cost loan that’s designed to be repaid on your next payday. The terms and structure can vary by state, lender and the individual loan. But payday loans can come with unique risks and are even illegal in some states. So if you’re considering a payday loan, make sure you fully understand the terms and risks.
Cash Advances
Some credit cards let you borrow a portion of your credit limit in cash. This is known as a cash advance and is another kind of short-term, high-cost loan. Using your credit card to get cash from an ATM is expensive, and cash advances might have additional fees, too. Plus, interest rates on cash advances are typically higher than interest rates on regular credit card purchases.
Debt Consolidation Loans
If you’re struggling to stay on top of all your bills, you might decide to combine-or 
consolidate-all your debt into one loan payment so you can focus on paying a single bill.
According to the FTC, some debt consolidation loans might require you to put up property as collateral. And the CFPB reminds consumers that debt consolidation loans don’t erase your debt. In some cases, you could end up paying more by consolidating debt into a different kind of loan.
- Evaluate bills and take steps to reduce expenses. If you can’t make payments on your bills, credit cards or other loans, the CFPB recommends working with companies and lenders directly. And if you’re a Capital One® customer, you can reach out directly to talk about available resources. You might also want to consider cutting nonessential expenses.
- Evaluate your savings and emergency funds. If you have money in a savings account or emergency fund, now might be the time to use it. And if you’re thinking about tapping into your retirement account early, make sure you’re considering all the factors. Again, every situation is different and it’s a good idea to speak with a qualified financial expert if you can.
- Explore alternative sources of income. There are online businesses that pay people to take surveys, participate in user testing, proofread content and more. Just make sure to watch out for scams.
- Look for other aid. There are nonprofits and other organizations that offer aid for service industry workers, freelancers and people struggling with medical expenses. And if you need immediate help getting food, you can learn more about how to access food banks.
- Keep an eye on your credit score. It can be easy to forget about your credit score when you’re dealing with financial uncertainty. But maintaining a good score can help you in the long run. With CreditWise® from Capital One, you can access your free TransUnion® credit report and weekly VantageScore® 3.0 credit score anytime without negatively impacting your score. And if your credit isn’t where you want it to be, there are some things you can do to help improve your score.
Explore Your Options
Before you make any decisions about personal loans, it’s important to explore all your options and research the pros and cons of each decision. If possible, it’s a good idea to talk to a qualified financial expert about your situation.
Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.