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.…

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.…