National Consumer Law Center Issues Report on Alternatives to Payday Loans

 Some banks and credit unions offer "alternatives" to payday loans that are sold as better deals for consumers than what is offered by store-front payday lenders. The National Consumer Law Center has just issued a report on the topic -- Stopping the Payday Loan Trap -- Alternatives That Work, Ones That Don't. An NCLC press release says that some "loans offered by banks and credit unions as 'alternatives' to high-cost, short-term payday loans may instead plunge consumers into a costly and nearly inescapable debt cycle – just like payday loans!" The report's principal auth Lauren Saunders explains that “[t]oo many providers of so-called payday loan alternatives hit consumers with some of the same onerous provisions that predatory lenders use to saddle unwary and vulnerable borrowers with loans they can’t afford to repay.” Check it out.

Comments

[thomas sabo charm]

he receives all the rejection he requires. Cole Smithey ColeSmithey.com

[Laura Morton]

The FDIC has issued guidelines for the Small-Dollar Loan Pilot Program.
The hope is that consumers will choose this type of loan over a payday loan. The maximum loan amount is $2,500. The APR has to be 36% or less. And the consumer has 90 days or more to pay back the loan.
It will be cheaper than the payday loan but it is still expensive.