BETON ROUGE, Louisiana (WAFB) – Payday loans are high value short-term cash loans, typically $ 500 or less.
It usually has to be paid the next payday, but when you return it, you will likely pay a commission of $ 10 to $ 30 for every $ 100 in debt.
A typical two-week payday loan with a commission of $ 15 for $ 100 equates to an annual interest rate, or an annual interest rate of nearly 400 percent.
But the convenience of getting cash quickly is needed especially by low-income families.
“The pandemic has really exacerbated payday lender problems, especially in poor and black communities,” said Brian Vines, an investigative reporter for Consumer Reports. “So what we have seen is the drive to provide better and fairer banking services to these communities.”
He shared some alternatives to using payday loans. for example, find a Community Development Finance Institute (CDFI) near you.
“CDFIs are financial service providers such as a bank or credit union whose mission is to provide financial services to low-income communities, places that many traditional banks largely exclude,” he explained.
Joining CDFI may be an affordable option. They can offer banking services for free or at a low cost with an initial deposit of just $ 25.
Another way to try is to find a nonprofit that offers a payment relief program.
Vines said there are charities across the country that offer everything from food aid to help with utility bills.
Modest needs awards free “self-sustaining grants” by matching applicants with donors.
It is worth taking the time to research to see which grants or programs might meet your needs.
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