In need of quick funding? Here are some alternatives to direct deposit advances.
Because of the strict regulations most states have concerning payday loans/cash advances, there are very few banks that offer direct deposit advances to their customers.
If you’re looking for a short-term solution to a financial setback similar to a direct deposit advance from a bank, we have some alternatives for you to consider.
Why are direct deposit advances no longer offered?
Wells Fargo, Regions and US Bank once had options for customers seeking to withdraw funds when they didn’t have the money. Similar to payday loans, this was a short-term solution that functioned like a cash advance from a credit card.
In November 2013, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation released standards that banks would need to meet if they chose to continue offering direct deposit advances to customers.
Because of the growing controversy surrounding payday loans and the disreputable lenders that worked in this area of consumer loans, many banks decided to stop issuing direct deposit cash advances to avoid criticism and potential illegal activity as state regulations changed.
What are some other ways you can borrow small amounts of money?
If you have bad credit or don’t want to take out a credit card cash advance, you still have options.
- Get a payday loan. If you need a small amount of money, you can consider a payday loan. Although not available in every state due to the high interest rates, a payday loan can be a good solution if you’ll be able to repay it within two to four weeks. There are plenty of lenders to choose from, and you can even go through a lender-matching service if you’re unsure where to state.
- Get an installment loan. Installment loans function much like payday loans except that you have a longer term to repay, usually three to six months. They are less heavily regulated as well so you’re likely able to get one even if you live in a state that has banned payday lenders.
- Get an payday alternative loans. A payday alternative loan is an inexpensive short-term loan that’s regulated by the National Credit Union Administration (NCUA). Depending on the credit union you borrow from, the PAL can be like your typical payday loan that requires a one-time repayment or an installment loan, which allows you to repay over multiple repayments.
Compare your loan options and apply today
Check the website of any provider you’re interested in to confirm they operate in your state of residence.
What are the benefits of applying for a short-term loan?
- Fast turnaround time. Whether you apply online or in-store, you can expect to receive your approved loan fairly quickly. This can be as son as the next business day. If you apply online, you may have the option of picking up your approved funds in-store.
- Wide range of loan amounts. The minimum and maximum you can apply for depends on the state you are applying from and how much you are eligible for, but usually between $50 and $1,000 is available for payday loans and up to $5,000 for installment loans.
- Convenient online application. Apply online where there’s no need to fax any paperwork over. The application process can be completed online in just a few minutes.
What to watch out for
With direct deposit advances no longer an option for most customers, you need to weigh up your options to identify the right loan for your needs.
Before you take out a payday loan, keep in mind that these are short-term solutions to sudden financial setbacks. They have high interest rates and should only be used for emergencies, not long-term debt. Be sure you can repay the loan by the due date, and always read the contract carefully before signing. If you don’t agree with any of the terms listed, you are under no obligation to accept.