Birmingham, AL Payday Loan Alternative

With a population of over 212,000 people, Birmingham is the largest city in Alabama. It truly has something for everyone, as those who appreciate nature can check out Ruffner Mountain or the Birmingham Zoo and science fans have the McWane Science Center. For those who like to shop, there’s the Summit Birmingham, Brookwood Village and Western Hills Mall, to name just a few of the biggest shopping centers in the city.

Many Birmingham residents love the convenient shopping opportunities, but this has also resulted in the average resident having $5,874 in credit card debt, according to a 2015 report from CardHub. Considering the median household income in the city was $51,459, those credit card payments can add up quickly.

Alabama Payday Loans

One unfortunate consequence of that credit card debt is that paying it off can leave people unable to put away money every month in an emergency fund. If an unexpected expense occurs, they may decide a payday loan is the only way to cover their costs. Although these loans attract borrowers because they provide almost instant access to cash and the approval rates are high, payday loans also have their drawbacks. The biggest problem with payday loans is the term length, which tends to be about 14 days. This doesn’t leave the borrower much time to make enough to pay off the loan, and oftentimes paying the loan off will leave them with very little money to get by until the next payday. Many borrowers resort to extending their payday loan, which often comes at the cost of additional fees. This cycle of borrowing and extending or borrowing again can quickly add up to an overwhelming amount of debt.

Choosing an Alternative to Payday Loans

When it comes to quick, convenient financing, there are more options available than just payday loans. Ladder Credit has an alternative available in the form of personal lines of credit. Personal lines of credit function a bit differently, as they are a form of revolving credit instead of loans paid out in lump sums, and they hold several important advantages over payday loans.

How a Line of Credit is Different than Payday Loans

When you get a payday loan, the lender issues you a loan for the full amount, which is then supposed to be paid off on the due date. If a borrower needs more money, then he’ll need to apply for an additional loan – and with payday loans, this is typically not allowed until the initial loan is repaid.

The process is much different with a personal line of credit. After an applicant has received approval for a certain credit limit, he may request a withdrawal of funds in any amount needed, up to that limit. Borrowers of a line of credit don’t need to withdraw the full amount, and they only pay interest on what they withdraw.

To keep the line of credit active, borrowers only need to make the minimum payment. If they ever need to borrow more money, they may withdraw up to their full available credit amount, and paying down their balance increases the amount of credit available to withdraw. Ladder Credit deposits all withdrawals directly to borrowers’ checking accounts, and deposits are funded as soon as one business day from the withdrawal request.

Applying for a Line of Credit

The application process with Ladder Credit is simple and quick. Interested borrowers can submit an application online and then go through a brief phone verification, or they can call in and handle the entire application process over the phone.

The application requests information about employment, income and banking accounts. Ladder Credit verifies that length of employment and bank account history both meet duration minimums, and that applicants earn enough money to meet the minimum income requirements. Ladder Credit does not extend credit to members of the US military, their spouses or dependents. Additional requirements and limitations may also apply.

Using payday loans can risk initiating a difficult cycle of debt. Personal lines of credit allow borrowers to withdraw money and pay it back on a flexible schedule. Apply now!

The content on this site is for informational purposes only and is not professional financial advice. Ladder Credit does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.

*Not everyone will be approved

The line of credit account is designed as a short-term cash flow solution and not designed as a solution for longer term financial problems. Additional Fees may accrue if the outstanding principal balance is not paid at the end of the cycle. Credit counseling services are available to consumers who are experiencing financial problems.