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Cash advances and payday loans are an expensive way for individuals to get emergency cash for paying bills and expenses. The interest rate that consumers pay on a payday loan can go up to 300% or higher. The good news is that there are cheaper alternatives now being offered by banks, credit unions, the FDIC and other lenders, and many states are starting to regulate payday lenders that operate in their states a little more closely. Some of these alternatives could have interest rates that range from the high teens to a still high 100%+, but they are still much better alternatives for individuals who need immediate cash. Find details on many of the alternatives that consumers have below, and get information on various options that people have. It is always a good idea to look into all different types of short term loans and alternatives to cash advance loans.
Many regional and national banks have come to the realization that consumers need some type of lower interest rate alternative to payday loans, so they are starting to come out with their own products and offerings. While the interest rates charged by banks are still not cheap, the fact is that they are much lower than salary advance loans from payday lenders.
US Bank Checking Account Advance - This product is marketed as a short-term line of credit that is offered to consumers in which the customer can borrow money, in advance, from an upcoming direct deposit that is scheduled to go into their checking or saving account. Read more on US Bank Checking Account Advance.
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Fifth Third Bank Early Access short term loan - Another payday loan alternative in which a customer can take an advance on a future direct deposit. The deposit will be automatically repaid after a predetermined amount of time, and it is only offered to customers who have historically been in good standing. Get more details on the Early Access Loan program.
Wells Fargo Direct Deposit Advance Service - Funds will be immediately deposited in your account to help pay for unexpected or emergency expenses and bills. This nationwide, leading bank only offers this product to a limited amount of customers who bank in certain states. Get more information on the Wells Fargo Advance.
Federal government FDIC short term, small dollar loans - The Federal Deposit Insurance Corporation (FDIC) is partnering with regional banks in an effort to provide low income and consumers with poor credit access to a short term, low interest rate payday loan alternative known as known as small dollar loans. The goal of the government is to try to improve access to credit and emergency funding. The interest rate is capped at a reasonable rate to help facilitate lending and borrowing for low income individuals. Learn more on the FDIC small dollar loan options.
Salary advance loans - Many credit unions are offering a low interest rate alternative to their members. They are usually packaged a program that offers both financial counseling, a savings account, and a low interest rate salary advance loan. Learn more on credit union salary advance loans.
Stretch pay loans - A newer offering from some credit unions. It is is a very low interest rate alternative to payday loans, with rates capped at a very reasonable interest rate that will make the loan easier to repay. Get additional details on stretch pay loans.
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If after exploring the different alternatives to high priced payday and salary advance loans, if you still have no other choice but to take out a payday loan, then be sure you know your rights and have information on the laws and regulations in place that are intended to protect borrowers. Many states now regulate lenders, including putting limits on how much a consumer can borrow and states will often determine what the highest interest rate that can be charged is. You do not want to be taken advantage of by a payday lender. Read up on payday lending laws in your state.
If you currently have outstanding payday loans, and will be using one to get emergency cash, you should strongly considering consolidating them. As the fact is that sometimes people do not qualify for any alternatives, and have no other choices but to use a salary advance loan. So if you do need to use one, be sure to pay it off as soon as possible. Consolidation is a great way to do this. More on payday loan consolidation.
Many individuals who take out payday or salary advance loans to pay bills or other expenses probably have some type of more significant credit or financial issue. The borrower may have a poor credit rating, have a history of managing their money irresponsibly, or they may just be down on their luck and have no other options. Regardless, it is usually a good idea to speak to a non-profit credit counselor for advice, debt counseling services, and information on loan programs. A credit counselor may be able to offer you additional alternatives to a payday loan as well. Click here for a listing of national credit counseling agencies that can also help you address or eliminate payday loans.
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