Consumer Reviews: Alternatives to Payday Loans

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If you are struggling to pay your bills, you may be considering 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: There are alternatives – and as Consumer Reports explains, you just have to know where to look.


Missy Juliette was struggling to pay her rent and overdue utility bills. As a last resort, she turned to payday lenders.

As Missy says, “I had run out of credit cards and I had already asked my family for help
Past, so I couldn’t go to them again … I was embarrassed. “

Missy borrowed $ 730 in two separate loans. One of those loans had a whopping 266 percent interest rate, and she struggled to repay it.

And unfortunately, for the millions of people like Missy in need of emergency money fast, payday lenders really are one of the few options out there. – But that could change soon.

Brian Vines, Consumer Reports Investigative Reporter says, “The pandemic has really exacerbated problems with payday lenders, especially in low-income and black communities. So what we’ve seen is this pressure to provide better and fairer banking services to these communities. “

What can you do now if you need emergency money quickly? First, try to find a community development financial institution in your area.

“CDFIs are financial services providers like a bank or credit union whose job it is to provide financial services to low-income communities, places that many traditional banks have largely excluded.” – Brian Vines, consumer investigative reporter.

Joining a CDFI can be affordable – offering banking services with little or no cost
an initial deposit of only $ 25.

Another route you can go is to find a nonprofit with a payment facilitation program. What Missy eventually did sought help from Exodus Lending, a nonprofit committed to helping people get rid of their payday loan debts. They consolidated their loans with no fee and zero percent interest.

Missy is doing better financially. “So instead of $ 50 to $ 200 a month in fees, I’m paying an interest fee of $ 80 a month per year, and that helped so much.”