Payday Loans to HELP pay bills

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Learn about payday loans and other financing products such as Peer to Peer loans and Salary Advances from Credit Unions.

There are various short to medium term loan options, some of which may offer low interest rates, that people can use to get help paying bills, rent, and other expenses. In general, many of these options should only be used as a last resort and also read the fine print of any offer. They include:

Payday loans may be an option as a last resort and can be considered if you have the means to pay it off within a week or two.
Credit unions provide customers with access to low interest loans and some lenders do not restrict who can enroll.
The FDIC partnered with national banks and regional lenders to offer low cost financing to consumers, and these are known as United States Government small dollar loans.
Interest free financing from non-profits and short term loans may be issued at a zero percent rate, which saves the borrowers a significant amount of money.
Social and lending networks can be turned to, and these are known as peer to peer loans.
National banks created their own low cost alternatives to payday loans. Examples include the Wells Fargo Direct Deposit loan.
Refinancing a mortgage has some pros and cons to it. Learn more on home equity loans.
Car loans, or those looking to refinance, can turn to non-profit organizations for assistance. This is available for work related reasons. Low interest auto loans from Ways to Work.
Credit unions and small regional banks also offer their own versions of payday loans. The interest rate will be much lower on these. Learn more below on stretch pay loans.
Use your automobile for collateral when taking out a car title loan.
Low interest financing may be available from charities, non-profits, banks, and other lenders. Find an all encompassing list of lower interest rate Payday Loan Alternatives.

Learn about all of your options for short term loan products and financing options below. Consumers should always be mindful of taking on additional commitments though. So find ways to get out of debt. Today’s economy is making it challenging for people to get approved for financing, so many borrowers are turning to personal loans as well. While the interest rate is not the lowest, they are usually a much better option than using a credit card or cash advance. Another benefit of a personal loan is that even consumers with poor credit scores can usually get approved, in particular for an unsecured personal loan from a bank or credit union. Learn more.

Payday cash loans, or some of the alternatives listed below, can be a very risky and costly way to get help with bills. Borrowers should use them only with much caution and also be sure to pay the amount back as soon as possible. You do not want to start a never ending cycle using these products.

These loans are typically priced at a fixed dollar fee, in which the fee represents the finance charge that needs to be paid by the borrower. Because these loans have such short repayment terms, the corresponding interest rate and cost of borrowing is very high. In return for the payday loan the borrower will usually provides the lender with a predated check or bank debit authorization.

Peer to Peer or Social lending

This is a type of lending that occurs directly between regular everyday individuals ("peers") without the participation of a traditional bank or financial institution. Interest rates can often be lower than a bank or payday loan and the sign up process is usually very quick. This industry also tends to be less regulated than some others.

Salary Advance Loan from a Credit Union

Salary Advance Loans, which are a relatively new loan offering that have been developed by Credit Unions, are a lower cost alternative to receiving cash then the relatively high costs of payday loans. Read more credit union salary advance loans.

Wells Fargo Direct Deposit Loan

This product offered by Wells Fargo is not as expensive as the traditional payday loan, but the interest rate is much higher than the credit union products indicated immediately above. You will also be dealing with one of the nations leading banks so borrowers will tend to have more protection given to them. It is another option to consider if you need short term help with paying unexpected bills or money for dealing with financial emergencies. Learn more.

US Bank Checking Account Advance

This is another option to consider if you need funds to pay emergency bills. You can get an advance on your next paycheck, and the rates are not as expensive as a typical payday lender. It is a short term loan product that was created primarily to provide cash to people who have unexpected bills but who are gainfully employed. If you decide to use this product, only borrow what you can afford to pay back with your next paycheck.

Fifth Third Bank’s Early Access

This bank is also offering an alternative to payday loans. This tends to be more of a regional offering. The interest rate, while still high, is still lower than a typical payday lender.

FDIC Small Dollar Loan

The Federal Deposit Insurance Corporation (FDIC) has created a new small dollar loan product that provides short term, low interest rate loans to low-income Americans, many of which have low or no credit scores. A huge advantage of this option is that rules and regulations are put into place by the federal government FDIC organization. This federal government product is intended to be an alternative to high cost payday and salary advance loans.

Low interest rate auto loans from Ways to Work

If you need a car loan, Ways to Work is a non-profit organization that offers people with poor or no credit a low interest loan. They focus on issuing auto loans. The Ways to Work car loan program is intended to help individuals remain in or advance in their job, and they understand that adequate transportation is needed to do that. Funds can be used to buy an affordable used car.

Low interest rate Stretch Pay loans

This product is another low interest rate offering that is made available by many credit unions and small regional banks. It is really a credit unions version of a payday loan, however you will be dealing with a major financial institution so there are advantages. They can be used to pay emergency bills and expenses. Learn more on stretch pay loans.

Credit union financing options

There are several regional and national credit unions that are available to the general public. Anyone can join by making a very small donation to a non-profit (usually $5) and opening a savings account. Customers will then have access to loans that can be used to pay a number of expenses, such as rent, car repairs, and auto loans. Some also offer low interest rate mortgages, credit cards and other forms of financing, such as signature loans.

No collateral Signature Loans from credit unions and banks

If you need a financing resource that does not require collateral, and they does have a higher interest rate, then a signature loan may be another option. While the interest rates will vary based on lender and your financial situation, they will tend to be higher than a credit card as borrowers do not need to make any commitments to providing collateral. So tread carefully.

Home equity loans

A home equity loan is another very effective way to consolidate debt and help pay bills. It does come with advantages (such as tax breaks) and disadvantages (home is collateral). Learn more and find how a home equity loan can help.

Car or automobile title loans

This product will allow people to borrow money against the value of their automobile, and their car is in effect used for collateral for the loan. It can provide quick cash, but there are many risks. Learn more on car title loans.

Interest free loan financing

There are non-profits, including faith based organizations, that offer funds for emergency situations. The loans will usually be offered at a zero percent interest rate to borrowers. The money disbursed can help those individuals who do not qualify for any forms of government aid or assistance from other organizations.

One of the main organizations is the Association of Jewish or Hebrew Free Loans. They operate from dozens of different offices around the country. The organization will help people of all religions and backgrounds. The funds are used to pay for bills, finance a new car for work, pay housing costs such as rental expenses or a deposit, or medications. This type of financing is much better than using a payday loan, and tens of thousands of families benefit from the service. Click more information.

Federal Employee and Education Assistance Fund provides no percent interest loans to government employees. It is limited in that this program is only for civilian employees of the federal government, however this does include postal workers as well. The organization provides this service to help those families that are faced with a short term crisis situation. The loans from FEEA have been used in the past for a wide range of expenses, including certain medical bills, emergency car repairs, or even to pay the rent for a month or so. Read Federal Employee and Education Assistance.

What is a payday loan?

A payday loan is a small, short term loan (the maximum loan is usually about $500-$1,000) that does not require a credit check be completed. Payday loans have very short terms and they must be paid back quickly, typically within several days, or a few pay periods. Payday advance loans usually are marketed as a way to help consumers with paying short term bills until the next paycheck is received by the borrower. Sometimes also called “payroll advance”, “check cashing”, or “deferred deposits,” these short term loans provide a fast way to access emergency money to help with paying bills. Many states regulate them as well as the entire industry. Note that many payday lenders are not bonded, licensed, or regulated at all by those important consumer laws.

How does a payday loan work?

As an example, imagine your car broke down and you then decide to borrow $300 for the car repairs from a payday loan lender. You will write a postdated personal check for $340 (which is the $300 plus a finance fee) made payable to the lender. You will need to submit this information, or enter the information online if you are applying for a payday loan through the internet. The lender will then advance you the $300 for a short, set period, usually 14 days. When that period is up, you need to pay the lender $340 in cash, let them deposit the postdated check you gave them, or you can write another postdated check for the $340 amount plus an additional finance fee. Note, if you do not pay this loan back to the lender in full at the end of the term, you will then be charged an additional finance charge and other fees. This is why it is critical to not enter into a cycle of missing payments.

Who uses these types of cash advance loans?

Just about everyone with some type of steady income and a checking account can get a payday loan to use for help with paying their bills or debt. However, this type of loan is generally most common for borrowers who do not have access to savings accounts or credit cards. Since these loans do not require a background or credit check, people that have credit problems or no credit scores will often turn to payday loans as a quick source of money. Recent immigrants and military personnel will also often use payday loans.

Benefits of using a payday loan

If used properly, payday loans can be a good way to easily and quickly borrow cash during an emergency if you have no other financial options. As an example of this, you may use a payday loan lender for a temporary and immediate financial need such as a car repair (so you can get to work and don’t lose your job), medical bill, or another one-time expense. If you do decide to use them, be sure to pay it off with your next paycheck, if not earlier. Payday loans are helpful for people who don’t have credit cards or savings available. As the loans do not require a credit check, they are easy for people with financial problems to obtain.

Negatives of a payday loan

It is absolutely, 100% crucial that you repay a payday loan immediately, as soon as possible. The way many people get into trouble with these types of short term, cash loans is they are unable to immediately and quickly repay the debt. Why is this so important? If you cannot repay the payday advance loan at the end of the term, you will be charged expensive additional fees, and the interest rates may reset. It is extremely costly to be stuck in a never ending payday loan cycle for an extended period of time, and it can lead to bigger financial problems. Payday loans are also significantly more expensive than some other methods of borrowing money, as indicated on this site. In many instances the annual percentage rate (APR) on a payday loan will average about 400%, but in extreme cases, the APR can be as high as 5,000%. You need to compare that to a standard credit card that has an APR of 12%. A standard bank loan APR is around 7%. If at all possible, it is always better to use a credit card or, better yet, tap into your savings in the event of an emergency to get needed help with paying bills.

A major challenge is that many payday lenders may make it difficult to stop a withdrawal from your bank account. Borrowers have been charged improper overdraft fees and other charges on their accounts. The federal government and the Electronic Fund Transfer Act can protect consumers from these fees and recurring withdrawals. It also helps regulate the industry and the transfer of funds. Read stopping withdrawals from payday lenders.

The Consumer Federation of America has created some studies on the challenges and expenses of payday loans. The non-profit also has ideas and suggestions that potential borrowers should explore when they are seeking any type of short term financing.

If you need help eliminating a payday loan

If you are over your head in payday loan obligations and debts, and need assistance dealing with them, you do have numerous options. Some of these can include payday loan consolidation programs and using the services of various companies that work with lenders. Find additional ways to deal with payday loans. More payday loan consolidation.

What about usury laws?

Many states have very created, or are creating, laws that help regulate the lending industry. These are called “usury laws”, and these regulations define permissible lending rates and terms. Some states now also have laws that will regulate the amount a payday lender can lend to consumers as well as how much they can charge for the payday loan. Other states are now banning payday lending outright, such as New York State. Granted, these state laws vary widely and are always changing. Payday lenders are now often working around these laws and regulations by partnering with banks that are based in other states, such as Delaware, or even overseas. It is extremely important to read the fine print on the payday loan offer, and you need to understand your consumer rights, or get help with your rights.

Should I apply for a payday loan?

Each and every time before you consider applying for any type of payday loan, you need to step back and consider your other options for help with bills.

Be sure to ask yourself if it really is an emergency. As mentioned, payday loans can be helpful for one-time emergency costs such as a car repair or medical bills, but they are not a good idea for funding unnecessary expenses. Ask yourself, is it possible to wait to repair your car or can you wait to pay your bills until your next paycheck? Always remember that a $25 late fee on a bill is much cheaper than a $40+ finance charge for a payday advance loan. Think about some other ways to borrow money to get any help you may need for your bills.

Alternatives to payday loans include:

There are some lower cost options for consumers to consider. For example, one socially responsible lender that is partly owned by Google is LendUp. While they do offer short term loans, the interest rates are much lower and the financing is also combined with free credit counseling and other educational services for borrowers. More on LendUp low interest rate loans.

Some other suggestions that consumers should consider are the following:

Charge the amount of your bills to your credit card
Negotiate a payment plan with your creditors. Lean more.
Receive a payroll advance from your employer
Use your bank’s overdraft protections
A Salary Advance Loan from a credit union. Continue.
Try to obtain a line of credit from an FDIC approved lender
Take money from your savings account for help with bills
Apply for a traditional small bank loan
Ask a friend or relative to lend you the money
Ask your creditor for just a little more time to pay a bill
Use the cash advance features on your credit card
Peer to peer loans.

If you have evaluated these, and any other options you have and still decide an emergency payday cash loan is the best option for you, then you need to be sure to understand all the terms, costs, and read the fine print before you apply. If you do not understand them, ask for help.

Look around for a trusted payday lender that offers lower fees and rates.
Borrow just as much as you know you can pay back to the lender with your next paycheck.
When you get your next paycheck, your need to make your first priority as paying back the loan immediately.
Look into a work from home job to help pay off a payday loan and assist with bills.

What can I do to better prepare for any financial emergencies?

While no one can always predict an emergency, you need to be prepared. Ideally, you should always try to keep enough money to cover your household bills for at least two months in a savings account. If this savings goal is too high, you need to aim to save at least the amount of one paycheck. Also, it is a good idea to have a few credit cards available to you for unexpected costs. If you do not have a credit card now, you can easily search for a credit card online.

Payday loans can be useful is certain situations for consumers who need emergency cash to help pay emergency bills for a short period of time. These loans will come with high costs, risks and numerous dangers. However, if you do have limited options and if you also understand how to use payday loans correctly, many people can in fact make the most of these payday loan services, but be careful.