Do Traditional Banks Offer Online Payday Loans?
Direct Lender Payday Loans Aren’t Available at Most Banks
Stop if you’ve asked yourself that question. Does my bank offer direct lender payday loans? Meaning can I get an online payday loan or short term loan from by neighborhood bank? Or do I need to find a payday loan direct lender, be it an online company or a 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 of the large direct payday lenders 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. The banks don’t refer to these cash advances as “payday loans”. The big banks 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 direct deposit advance. But they’re no different then the payday loans and installment loans. Many are offered by reputable direct payday lenders all across the country.
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 were confronted with the high interest rates. Most of the finance charges come with these types of payday loans. It’s ironic to many people in the short term lending industry that banks and consumer groups would criticize the payday loan industry. When 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 large direct lenders online! For example, a large national bank recently stopped offering “online installment loans”. Otherwise known as an online cash advance, as 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 payday loans direct lender from lending 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.
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 supposed to be less harmful then what the traditional direct payday lenders 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. **Update** 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 **Update**. With that being said, cash advances 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 direct lender payday loans.
You can still get direct lender payday loans at some banks and credit unions!