Beware of high commissions and high interest rates on payday loans

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If you are struggling to pay your bills, you may be considering a payday loan. But Consumer Reports warns to be careful! Even after some recent reforms, many of these loans are still accompanied by high fees and very high interest rates. The good news is there are alternatives – if you know where to look.

The pandemic has indeed exacerbated the problems with payday lenders, especially for people from low-income and black communities. Thus, attempts were made to provide them with better and fairer banking services.

What can you do right now if you urgently need money in an emergency? First, Find a Community Development Financial Institute (CDFI) near you. They are financial service providers such as a bank or credit union whose mission is to provide financial services to low-income communities that many traditional banks largely exclude.

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And joining CDFI may be affordable. They offer banking services for free or at a low price with an initial deposit of $ 25 or more.

Another way you can go is to find a nonprofit with a benefit program. For example, Lending outcome is a non-profit organization that helps people pay off payday loans. These groups combine your loans without commission and at 0% per annum.

If you are still considering getting a payday loan, the state laws in Georgia and Florida are different. As a rule, it is illegal in Georgia if the creditor does not have a special license from the state. Here are the rules: https://dbf.georgia.gov/payday-lending

It is legal in Florida but is regulated by a consumer protection government. Here are the rules: https://flofr.gov/sitePages/PaydayLenders.htm

All Consumer Reports Copyright 2021 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a non-profit organization that does not accept advertising. He has no commercial relationship with advertisers or sponsors on this site. Visit consumer.org for more information.

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