Some Consumers Can Use Employer To Attain Payday Loan
Most people who are in a financial bind turn to a payday lender to help them get through the tough monetary times. About 78 percent of Americans are living from paycheck to paycheck, turning to these loans due to their convenience. However, these loans come with very high-interest rates and, with the option to roll over balances, it can leave some consumers in a never-ending cycle of debt.
There are several Silicon Valley companies that have begun offering alternatives to payday loans. For example, PayActiv and Earnin, offer their workers a chance to attain the money they need when it’s earned. TrueConnect, SalaryFinance and HoneyBee will let employers provide their employees low-cost emergency loans.
What should you know about emergency loans and paycheck advances?
This option is not something new with many workplaces offering this program, giving you money when you need it after you’ve earned it. PayActiv and Earnin are technology companies that offer their employees a streamlined approach to ensure their employees’ have their two-week pay cycle.
Palo Alto, Calif. company Earnin provides a mobile app that asks consumers for their timesheet and lets them take out some of their money after they’ve earned it. The company does provide a tip option that can be deducted from their actual paycheck.
PayActiv uses the employer’s payroll system to offer something similar. It sends the employees’ earned wages to their bank account or a prepaid debit card. Wal-Mart is one of the companies that use the service but charges the employees a flat $5 fee to use it. They also provide budgeting tools and financial counseling.
Emergency cash is offered by SalaryFinance, HoneyBee and TrueConnect in the amount of $250 to $3,000 using the employer’s benefits portal. Each company will look at the employee’s income and employment information rather than tribal loan information. If a person has a low credit score, they may not disqualify you from getting a loan. They do, however, report information to the credit bureaus, which can either help or hinder your score.
Keep in mind that these services are not the end all, be all if you constantly spend money or in over your head in debt or have a low income. Instead, it might be a wise idea to create a monthly budget, find ways to make money or use the snowball strategy to pay your debt off.