The FDIC Small-Dollar Loan Pilot Program

Payday loans are a product that’s aimed at a specific need. There are people who need small-dollar loans or even 1000-2000-3000 dollar loans. In many cases, they have poor credit, so they’re forced to pay the high interest rates on payday loans. The short terms of the payday loans mean that the fees are relatively small, even though the APR is huge. Still, payday loans are controversial and there are those that want to see other solutions in the marketplace.

Back in February of 2020, the FDIC started a two-year pilot project. The idea was to study affordable small-dollar loan programs through traditional financial institutions. The program involved 30 banks ranging in size from small local banks to national banks.

The idea behind the program is to get these banks to experiment with small-dollar loans. Specifically, these loans would:

Be for no more than $1,000.
Have a payback period of between a pay cycle (usually two weeks) and 36 months.
Charge an annual percentage rate (APR) under 36 percent (ExtLoans).
Include no penalty for prepayment.
Have fees that are limited to cover actual expenses.
Include an automatic savings component.
The study has gathered a variety of information in the process of this study. The study would consider whether the bank already offers small-dollar loans, whether it would implement a new program, how big the program would be, how it would be structured and marketed, and how the application process would work.

The study is complete, but all of the data isn’t in yet. You can look at data from the first year of the pilot, however.

If the program shows that these programs can work well for banks, it will likely mean options for people who, up to this point, have had to turn to payday loans. It will also put pressure on payday lenders to offer better terms. It will be interesting to find out the results of the study, and to see whether traditional lenders can really compete and even be profitable under the specific guidelines in the program.…

Dealing with Debt

Dealing with debt can be difficult, especially if that debt is high-interest debt such as a payday loan. While you may be able to pay off a payday loan rather quickly, it can be tough to deal with other sorts of debt like out-of-control credit cards.

Because so many people find themselves in a tough spot right now, there are many companies offering services to help you deal with debt. In some cases, these companies are legitimate and helpful. In some cases, they’re shady, operating within the law but in an unethical fashion. In other cases, they will lie to you outright.

Whenever you hear a sales pitch from a company that wants to help you deal with debt, you need to listen carefully. Here are some warning signs:
Dealing with Debt
Watch out for overpromises. Yes, some companies can help you to pay off your debt for a smaller amount than what you owe. Watch out for a company that guarantees that it will happen, however. There is no guarantee that any given creditor will be willing to accept any sort of partial payment. Instead, contact your creditor yourself, and find out if they have options for you.
Pay attention to fees. Some debt reduction companies charge a hefty fee. Even if they claim it’s only a “small percentage” of what you’re paying, find out exactly how much those fees are. Whether it’s a regular monthly service fee, a fee for establishing an account or a final fee.
Keep communication open. If a company tells you to stop communicating with your creditors, watch out. You may still wind up with late fees, interest and other charges. Your credit score may also be hurt.
Be realistic. If a company tells you that creditors won’t sue you for not paying on an unsecured debt, be careful. Creditors can and do often sue. If they win a judgment, they can even garnish your wages.
Know how credit reporting works. If a company claims that they will “fix your credit report,” they aren’t being exactly honest. The only way your credit report can improve is if you ask the credit reporting company to correct errors and if you do better about paying your credit.…

5 Ways to End the Payday Loan Life Cycle

You needed a quick bit of cash and decided that a payday loan was the way to go. Weeks, even months, later you have found yourself back at the payday loan office asking for another quick bit of cash. You want to get out of this cycle, but how do you do it. We will show you how.

Know your financial situation. The first key to getting out of the payday loan life cycle is to know where every dime you spend goes. Keep all your receipts so that you can sit down at the end of the week and go through everything you have spent money. You might find that spending half your cash on beer might be something you have to put on hold for a few weeks.
Take up the lost art of bartering. So, you really want that hot new videogame that just came out. You know you have a loan payment coming up, and you’re sick of staring at the person behind the payday loan counter. Get those work shoes on and go take care of a friend’s yard. Take your trade skill and put that to use. You will find most people are more than willing to pay you a videogame for cleaning their gutters.
Talk to your creditors. It is now time to swallow a bit of that pride and talk to the people you owe money to. There is absolutely no shame in talking to creditors or relatives and asking for a bit of an extension. Take it even further and ask creditor for a lower interest rate or an extension. You will most likely find that creditors would much rather get paid what they are owed at a later time than have to go to court to get that money out of you.
Ask a friend or relative for the money. This solution might feel a bit degrading, but this could save you a whole lot of headache down the road. We don’t all have rich friends or relatives, but asking for a few dollars from more than one person can add up to a fair amount of cash. If you happen to have a person you, can barrow a hefty chunk from ask them? No matter how you acquire the greenbacks from friends and family, it is better than getting it from those greedy payday loan people.
Get an extension on your payday loan. So, you have done all that you can, and you find that you really do only need one more week to pay off this payday loan. You know this because you have taken the time to sit down and look over your financial situation. Call up the payday loan people and ask them for one more week. Use that bartering skill and ask them for a low interest rate as well. Like everyone else, they want their cash as well.
These are just a few ways to help get you out of that payday loan dependency. Some of these might take a bit of pride swallowing, but better to sacrifice a little bit of pride than to get into financial ruin.…

How No Fax Payday Loans Are Beneficial

Richard FloresThe vast majority of consumers simply do not have the time and resources to search around for all of the different payday loan companies in their area. Nor do they have the time and energy to drive around to the bank picking up a copy of the bank statement. This combined with the fact that most people are unable to take off from work anytime they want means that it is very important to ensure you are looking for the easiest way to apply for a payday loan possible.

Generally speaking, the simplest method of applying for a payday loan are no fax payday loans. This is because there is no need to drive around town searching for paperwork, there is no need to drive around town searching for a place to apply, and there is also no need to drive around town to your bank to deposit the money. The plain and simple truth is a no fax payday loan will allow you to apply for the payday loan right from your home at the time that is most convenient for you.

Imagine how convenient it is for you to be able to apply for a payday loan at the time that is convenient for you. Remember, not everyone is able to take time off from work to apply; this means many people are only able to apply in the middle of the night. This is a huge problem for many people because the local payday loan companies are not open in the middle of the night. Yet the no fax payday loan companies are open and they do still accept your application regardless of what time it is. This makes them the most convenient option you have. Additionally, with the convenience you can apply for a payday loan while you are still in your pajamas before your day has ever started.

This is a huge savings of your time and will allow you to move along with your day, rather than trying to rearrange all of your daily tasks for the day. Rather than sitting around worried about when you will have time to go to apply for a payday loan you can move on with your day, you can work on the other aspects of your life that need attention. This makes it a great option for almost anyone. And at the same time, it is a huge benefit for anyone who does not want everyone to know that they have a payday loan.

After all, not everyone is open to the idea of using a local payday loan because they do not want the potential embarrassment. A faxless payday loan means that you can apply from the comfort of your home and never have to tell anyone that you have applied. You are able to maintain your privacy, move along with your day and still get the money into your bank account that you need to make sure that your bills are paid when you most need the money. As you can see, a no fax payday loan can be a huge help to anyone who is looking for a simple answer to their short term financial needs.…

When Payday Loans Are Not Good

A wide range of consumers look to payday loans as the ultimate solution to their financial problems. Yet there are also times when a pay day loan is not the best option for you to pursue. It is very important to ensure that you take the time to really analyze your finances before you start looking for a payday loan to be sure that you are actually in a good position to apply for a payday loan. Of course, almost anyone can be approved for a loan, but that certainly does not mean that it is a good option for you. Deciding if a payday loan is a good idea for you is a decision that needs to be made based upon your own personal finances. If you are looking at your finances and realize immediately that there is no way you can repay the money quickly then you are likely going to realize that a payday loan is not the best option for you. Additionally, if you are thinking about merely paying back a tiny bit of the loan at a time then a payday loan is not a good option for you.
payday loans not good
For borrowers who do not have a checking account there is typically no way to get a payday loan. It is also a requirement to get a payday loan that you be at least 18 years old. Other requirements that are common are the need for a verifiable income and also the need to have a verifiable residence that can be given in your application. If you do not have a checking account, have no verifiable income and do not have a verifiable address then you are going to be facing great difficulty in obtaining a payday loan. One problem that is unable to be overcome with payday loans is there is no way to use a co-signor. While typical loans will allow you to ask for a co-signor to assist you in securing the loan, a payday loan is obtained solely based upon your own qualification and will not permit the use of a co-signor. This can means if you are not approved for a payday loan that you are looking at an almost impossible task of actually being approved regardless.

As long as you are aware of the reasons that can harm your chances of being a suitable borrower for a payday loan you can generally take some steps to improve your chances of success. However, being aware that not everyone is a suitable candidate for a payday loan is important. Much as you may want and need a payday loan there is no guarantee that you will be approved. If you know for sure that a payday loan is not a suitable option for you, there is no need to waste your time by applying. Looking for a payday loan that is not a suitable financial tool for your needs is a huge waste of your time. It is a much better idea to instead look for a much more appropriate option that will fit your needs and your budget. Just take comfort in realizing that you are at least aware of your financial situation and are aware of what you can and cannot manage.…

Bad Credit Payday Loans Are Essential

Bad Credit Payday LoansFor those consumers who have bad credit there are few things worse than finding out that you are completely on your own when it comes to ensuring that you are able to pay your bills. The bad news about having bad credit is the fact that your options for getting money you need to pay all of your bills is severely limited. Yet at the same time, there are options and choices that you have which will work with you to ensure you can still get the money you need to pay your bills.

Generally speaking, those with bad credit have very few options available to them. One of the last remaining options that is available is a no credit check payday loan. While it may seem quite unfair that a payday loan is the only option available it does at least provide those with bad credit an option that can help them. The worse part comes when someone is unable to even qualify for a payday loan. The good news is the fact that very few people with bad credit are turned down for a payday loan.

The majority of people with bad credit are not bad people themselves, rather they have typically been given a very harsh time in life and merely need a bit of assistance to get back on track. Yet a single visit to a traditional bank can leave someone with bad credit feeling as if they are not worth the ground they walk on. But what else can someone do when they have bad credit? It is not easy to always make your budget fit your needs.

The majority of consumers tend to have more bills than they have money coming in, which can be a huge problem. The number of consumers who are unable to pay their bills continues to grow, yet the number of people who are declined after they apply for a traditional loan continues to skyrocket as well. Choosing to apply for a payday loan is often the only option that people have because it is the only way they are able to obtain the money they need.

Consider what happens to someone who has bad credit and is barely surviving when they suddenly are faced with a financial emergency. They usually have the disaster of deciding which bill is more important and working to ensure that they pay as many as possible. A payday loan for those with bad credit means that help is still just around the corner. Working with the payday loan lender they are able to still get the short-term loan they need to pay their bills, without having to struggle to determine which bills get paid, and which are merely shoved to the side.

Just because someone has bad credit does not mean that they do not have any financial problems, in fact those with bad credit usually have a much harder time trying to pay all of their bills. This means that generally speaking, someone with bad credit will have a much harder time paying their bills, which means that a online payday loans can be a huge help for someone who is struggling to ensure that their bills are paid and they manage their finances responsibly.…

Payday Loan Advance Alternatives

The alternatives to a payday loan are quite extensive, the choices that you have may not always be the perfect choice, but they are available. However, at times when you need money fast it is a case of choosing the best option for your particular needs that will get you the money you need the fastest. What works best for you might not be the best for someone else, and this is ok, it is merely about making sure you get the money you need. However, for those who are looking for fast money, what other options are there really?

Your first choice is of course a good traditional bank loan. This is the type of loan that most people think of when they first start thinking about a loan. However, if you have had credit problems, money problems, a new job, a recent move, or any other one of a huge list of potential problems you are looking at being denied quickly. However, while this can provide the cheapest interest rates for borrowers it can also take a large chunk of time to deal with applying for the loan.

Another alternative for those who own their home is a home equity loan. This is generally not appropriate if you are just needing a small amount of money. Plus, many times home equity loans require that you spend a certain amount in fees and other charges associated with getting the loan. This can make it widely out of reach for those who either do not own their home, need only a small amount of money, or have no money to spend on the fees associated with the home equity loan.

Title loans are also possible for many consumers. This will involve a person giving the title to their vehicle in exchange for a small loan. The loan is typically based upon a percentage of the value for the vehicle as well. This means that someone who has a very basic car with a lot of miles on the vehicle will not be able to obtain as much money as those who have a very new vehicle with very few miles. This can create a problem for consumers who have only a basic car but still need several hundreds of dollars. Additionally, many consumers are not comfortable with the idea of putting their vehicle at risk in the event that they are unable to pay off the loan.

The final popular alternative is a pawnshop loan. This type of loan involves taking an item that you own that is worth value and giving it to a business called a pawnshop. They then hold onto your item as collateral and give you a loan. Typically, it is very difficult to get enough money in a pawnshop to really handle any expenses that you may have which in addition to the very high interest rates make them a poor choice for most people. Another common problem is the fact that most people are not comfortable putting up their personal items for collateral.

Online payday loans will provide the money that people need without require them to put up the title to their car, without requiring them to place personal items up for collateral and without forcing them to obtain a new mortgage on their home that they may not be able to afford. It is by far one of the simplest methods that consumers have to obtain the cash they need very quickly and at affordable rates.…