The Financial Conduct Authority has recently introduced new legislation that will make it harder for payday loan companies to charge exorbitant administration fees and high interest rates. An article in The Daily Mail reveals that even though these restrictions will benefit the consumer, some people will find it more difficult to find a loan in an emergency. Here are some alternatives to this method of borrowing.

1. Logbook loans are a great option

If you need to access some extra finance, for a holiday or a treat you may find that a logbook loan is ideal. You can repay the loan in easy weekly or monthly repayments, and once you’ve applied for a loan, you’ll receive your answer to your request over the phone. If accepted you can have the cash in your account within an hour. If you have any other questions about this type of finance just go online and you can take a look at costs, as well as terms and conditions.

2. Balance transfers with your credit card

According to the website This is Money, it’s a good idea to use balance transfer credit cards to pay off your debts. There are numerous offers around, and the website does advise that you read the small print carefully. Look out for deals that offer 0% finance for up to two years. Some companies tempt new customers with generous offers, but many of these offer 0% for a short time and you could find yourself paying 18.9% interest once the introductory offer has come to an end.

3. Credit Unions are growing in popularity

A 2014 article in The Guardian highlighted the growing popularity of credit unions. You don’t have to have a perfect credit rating to borrow from one of these organisations but you will have to prove that you can repay a loan. These institutions are ‘traditionally seen as an alternative to banks, payday lenders and loan sharks.’ Interest rates are low, and credit union terms and conditions do vary from area to area. Some require that you save with them before applying for a loan, others don’t insist on this requirement.

4. Community Development Finance Institutions (CDFI)

If you’re looking for a local lender that may well look more favourably on someone with a poor credit rating, then these organisations may fit the bill. CDFIs are social enterprises and they lend to businesses and individuals, who may have had problems getting a loan from a bank. These institutions are cheaper than the payday loan companies, but don’t expect to receive your funds within hours. Fair Finance, a London based CDFI, has lent over £7.8 million since it was established in 2005.

5. Family and friends

Sometimes it’s easier to ask someone close to you for a loan rather than approach strangers. If you are going down this route, make a written agreement. So many relationships break down over money that if you draw up a simple contract, everyone will understand the terms of the loan, the repayment schedule and they’ll be no need for an argument should anything go wrong.