BATON ROUGE, La. (WAFB) – Payday loan are short-term, high-priced cash advances typically for $ 500 or less.
It’s usually due next payday, but when you do pay it back you’ll likely pay a fee of between $ 10 and $ 30 for every $ 100 you borrowed.
A typical two-week payday loan, with a fee of $ 15 per $ 100, equates to an APR of nearly 400 percent.
But the convenience of getting cash quickly is especially necessary for families in need.
“The pandemic has really exacerbated problems with payday lenders, especially in low-income communities and blacks,” said Brian Vines, investigative reporter at Consumer Reports. “So what we saw is this drive to provide better and fairer banking services to these communities.”
He shared some alternatives to using payday loans how to find a Community Development Financial Institution (CDFI) near you.
“CDFIs are financial services providers like a bank or credit union whose job it is to bring financial services to low-income communities, places that many traditional banks have largely excluded,” he said.
Joining a CDFI can be an affordable option. You can offer banking services for free or at low cost with an initial deposit of just $ 25.
Another way to try is to find a nonprofit that offers a payment facilitation program.
Vines said there are charities across the country offering everything from food aid to paying utilities.
Modest needs awards free “self-sufficiency grants” through the referral of applicants and donors.
It is worth taking the time to research to see which scholarships or programs suit your needs.
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