No Bank Account? New Payday Loan Alternatives Now Available
As the economy remains stagnant, many Americans are struggling to make ends meet. That's why some have turned to payday loans. But, these loans come with high interest costs and can be difficult to pay back, which is why more individuals are turning to payday loan alternatives.
One such alternative in California is something called the Self-Help Micro Branch. Millions of Americans do not have access to traditional banking accounts. But the Micro Branch fills a niche by providing basic services to those who live paycheck-to-paycheck.
The Micro Branch offers services such as check cashing and remittances.
And low-income individuals have other alternatives such as using BillFloat, a new company designed to be more affordable than traditional payday lending. The company's fees clearly posted on the website. There's a $14.99 fee for the bill payment service and a 3% per month interest rate. There is also a late fee of $10 if borrowers are behind in their payments.
Why should you look for alternatives for payday lending? It's because these types of loans can actually make life harder for struggling Americans.
Payday loans can sometimes border on being predatory, which is why they are illegal in some states. Signs of a predatory loan can include:
- High interest rates: some loans will have interest rates as high as 400% APR.
- Short loan term: lenders may only allow a very short loan term, such as a 2-week term, making it difficult for borrowers to pay them back.
- Balloon payment: some payday lenders do not allow for installment options and mandate a single lump-sum payment.
- Loan flipping: trapping consumers in debt is one way for payday lenders to make money, and can mean they continually make multiple loans to the same individual.
If you're in financial trouble, you might want to consider payday loan alternatives. Or, if you think payday lending is your only option, read the fine print carefully to avoid high interest rates and unwanted fees.
- Payday Lending Statutes (National Conference of State Legislatures)
- Credit - Loans (FindLaw)
- Catholic Conference in Iowa Weighs In on Payday Loans Law (FindLaw's Common Law)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.