Do Traditional Banks Offer Online Payday Loans?
Payday Loans Are No Longer Available at Most Banks
Stop if you’ve asked yourself if your bank offers direct deposit payday loans? Meaning can I get an online payday loan or short term loan from a neighborhood bank? Or do I need to an online payday loan company or neighborhood lender? If your local bank doesn’t offer online installment loans now they probably offered them within the past few years. These bank issued loans are similar to cash advance products offered by many companies in the US. Much like an online finance company, your bank will allow you to borrow a set amount of money. With the promise you’ll pay them back over time with interest. Luckily for the big banks they’ve been able to dodge the consumer wrath faced by many direct lenders that don’t have a direct deposit option. Large financial companies have been able to deflect public pressure by calling this type of cash advance a direct deposit advance. The banks may refer to this cash advance as a typical “direct deposit advance”. But they’re really no different then payday and installment loans.
Banks used to offer direct deposit payday loans with a high APR
Even though the big banks have tried to brand their cash advance loans as different from a direct lender payday loan it seems the public is catching on. Recently some of the largest banks in the country dealt with high interest rates. Most of the finance charges come with these types of online loans. It’s ironic to many people in the short term lending industry that banks and consumer groups would criticize the payday loan industry. Banks themselves are getting away with offering the same type of online payday loans. Most of these online advances feature interest rates that are equal to or higher. Compare to those offered by companies in our Database of Direct Payday Lenders For 2021. For example, a large national bank recently stopped offering “online installment loans”. We know these as an online cash advance and they were getting hounded by public pressure. The online personal loan they stopped offering was a program that allowed a consumer to borrow up to $1,000 from their future direct deposit. This high loan limit is hundreds of dollars higher than what’s legally allowed in most states! Most states limit loan amounts of anything more than $300 or $400. But this bank was able to offer their customer a loan of $1,000! Something doesn’t seem right here.
You can still get a direct deposit advance from some banks and credit unions!
As I mentioned earlier, some of the largest national banks no longer offer direct deposit loans because of public outcry. Other banks such as Fifth Third initially stopped offering cash advance loans. But once the outcry died down they rolled out a new product. The new service is less harmful than what the traditional short term lender offer. From what I understand this program is still being rolled out so it will be interesting to see how different it is from a normal cash advance loan. More and more banks are rolling out new products that function much like the direct deposit installment loans they used to offer. These “loan products” are still being formulated, but it’s likely they will be similar to how a traditional online loan functions. With that, cash advances from credit cards and car title loans still serve a purpose. We know there’s always a need for these types of direct lender payday loans. Many consumers have bad credit and don’t have the credit score or lending history to be eligible for a traditional bank offered loan. It’s ironic that the big banks initially got a pass on their “direct deposit loan” program. Only because they called them something different and didn’t call them high interest loans.