Better alternatives to payday loans

MEMPHIS, Tenn. (WMC / CONSUMER REPORTS) – If you are having trouble paying your bills, you might consider a payday loan. But be careful! Despite some recent reforms, many of these loans still come with high fees and very high interest rates. The good news is that there are alternatives, and as Consumer Reports explains, all you have to do is know where to look.

The pandemic has really exacerbated problems with payday lenders, especially for people in low-income and black communities. So there was a push to offer them better and fairer banking services.

What can you do now if you need emergency money quickly? First, find a community development financial institution in your area. They are financial services providers like a bank or credit union whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded.

And joining a CDFI can be affordable. They offer banking services for no or little cost with an initial deposit of just $ 25.

Another route you can go is to find a nonprofit with a payment facilitation program. For example, Exodus Lending is a nonprofit that works to help people get out of debt on payday loans. These groups consolidate your loans for free with no interest.

According to CR, when you end up going to a payday lender, knowing the laws in your state is important. USA.gov has a directory of federal consumer protection agencies where you can get help if you have a problem with a lender.

Consumer Reports TV News is published by Consumer Reports. Consumer Reports is a non-profit organization that does not accept advertising or has any business relationship with advertisers or sponsors on this website

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