Payday Loan Alternative

When people are in need of quick cash, one common option that comes to mind is a payday loan. Consumers often choose payday loans for two reasons when they’re in a financial bind: speed and convenience. When someone goes to a payday loan company, they can often provide funds the same day. Payday loans generally have minimal eligibility requirements, so approval rates are very high. Payday loan limits depend on the state, but customers can typically get a loan for hundreds of dollars or even amounts over $1,000.

The standard payday loan term is two weeks, equal to the length of the standard pay period. Customers pay the lender back with interest when they receive their next paycheck. Usually the loan is repaid with a check, post-dated to the loan payment date, or the borrower will authorize the lender to withdraw the amount due directly from their bank account. The problem is that paying off the payday loan in full often leaves the borrower with little funds left to cover regular expenses – and the borrowing cycle begins. If you should ever find yourself in need of money quickly, for whatever reason, it is important to know that there are other lending options available.

What Other Options Are There?

An alternative option for short-term financial borrowing is a personal line of credit. With a line of credit, the lender approves applicants for funds up to a certain amount. After approval, customers will have a separate line of credit account opened, into which their approved line of credit funds will be deposited. Customers can then request a draw from their line of credit, up to their approved limit, to be deposited into their personal checking account. Withdraw requests can conveniently be submitted online, or over the phone during normal business hours. Borrowed funds begin accruing interest from the day they are withdrawn from the line of credit account. Because it is a revolving line of credit, when balances are paid they become available to withdraw again at a later time.

How Does It Work?

Our secure website hosts a confidential application that takes only a few minutes to complete and submit. We only require basic information to apply – including contact information, Social Security number, banking account information, and employment and income information. During normal business hours, one of our representatives may be in touch within 15 minutes to verify applicant information over the phone. Once the representative has verified information and the application is approved, we will electronically deliver loan documents which need to be signed and returned before a line of credit is extended. After all documents are in order, the line of credit account will be opened and the approved credit amount will be deposited. As soon as the account is set up, customers can request a draw from their line of credit to be transferred to their personal checking account as soon as the next business day. Once funds are in the customers checking account, they can access funds as they normally would – by withdrawing cash from a bank or ATM, or transacting using their debit card, or checks.

To qualify for a line of credit, applicants need to have a source of income that meets our requirements. The minimum age is 18. Applicants cannot currently be a debtor in a bankruptcy case or have intentions to file for bankruptcy relief. We do not lend to members of the military, or their spouses or dependents. Other restrictions may apply.

Why a Line of Credit Instead of a Payday Loan?

One benefit to using a line of credit instead of a payday loan is that borrowers will only pay interest on the amount they withdraw and not for the full line of credit amount for which they are approved. Additionally, customers have more flexibility regarding repayment – the minimum payment is the finance charge and 10 percent of their outstanding principal. With a payday loan, borrowers may be expected to pay back the entire amount in two weeks. Another benefit of choosing a line of credit over a payday loan is the flexibility that it provides with how you borrow money. Because it is a revolving line of credit, payments made toward the balance due increases the available balance that can be borrowed. This is a convenient way to always have access to emergency cash funds if it should be needed.

There are many lenders out there offering fast cash solutions, so it’s important to know what options are available. We are here to help our customers with their short term financial needs. To learn more, give us a call today!

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.