CONSUMER FILE

Feds Delay Payday Loan Rule: Here’s What You Should Know

Apr 4, 2019, 6:46 PM | Updated: 7:14 pm

SALT LAKE CITY, Utah — In 2017, federal regulators issued a rule saying payday loan lenders have to verify a borrower’s ability to repay the loan. Recently, the Consumer Financial Protection Bureau put that rule on hold.

Here are three things you should know about payday loans.

First, they have extremely high interest rates. Payday loan fees run from ten to $30 dollars for every hundred dollars borrowed. The annual interest rate on that works out to be from 261% to 782%.

Next, you need to pay off the entire loan plus fees in two weeks. Lenders typically do not offer payday loans with monthly installments like a car loan.

You can get an extension, but you will have to pay fees with every extension. On a $300 loan with a $60 fee ($20 for every hundred borrowed), extending the loan two months adds up to a total of $240 interest ($60 multiplied by 4 two-week pay periods.) And, you will still owe the original $300.

But, there are alternatives.

Financial experts say using a credit card is one possibility. It is not exactly ideal to rack up debt, but the interest will be significantly lower than a payday loan. However, if the card is maxed out or you don’t have one, consider applying for a personal loan from a bank or a credit union – if you have average to good credit.

If your credit is below that mark, a peer-to-peer lender typically has lower lending requirements but far lower interest rates than payday lenders will offer.

Another option is a payday alternative loan offered by members of the National Credit Union Association. Backed by the federal government, these loans offer borrowers with poor to average credit loans with APRs below 30% with terms of one to six months as opposed to two weeks typically offered by payday lenders.

KSL 5 TV Live

Top Stories

Consumer File

...
KSL-TV

Sunday Edition: Countdown To Election Day

This week on Sunday Edition, we count down to election day looking at Utah’s biggest race and the latest polling data.
23 days ago
Roe v Wade Utah...
KSL TV

Sunday Edition: Republican Primary Election Debates; Roe v. Wade impact in Utah; Drought Conditions outlook

Doug Wright sits down with Senator Dan McCay to discuss the Supreme Court leaked draft opinion on Roe v. Wade and about the so-called "trigger law" that would go into effect if Roe v. Wade is overturned.
4 months ago
...
Matt Gephardt and Sloan Schrage, KSL TV

GPS gadgets and other devices that can help parents keep tabs on their children

Moms and dads have all sorts of gadget options that can help their peace of mind while keeping tabs on their kids.
1 year ago
...
Dan Spindle, KSL TV

How to stream Utah college football games

Here's how you can still watch your favorite teams on the gridiron without the expensive satellite or cable package.
1 year ago
A US government agency issued an "urgent warning" for users of Peloton's Tread+ following multiple ...
Jordan Valinsky, CNN Business

Peloton Tread+ Owners Told To Stop Using Treadmill In ‘Urgent Warning’

A US government agency issued an "urgent warning" for users of Peloton's Tread+ following multiple dangerous incidents with the machine, including a child's death.
2 years ago
...
Matt Gephardt, KSL TV

Gephardt: Gas Company Resumes Disconnecting Delinquents, Vows To Help Customers

Dominion Energy decided in March to cease disconnecting those who didn't pay their gas bills, but that program only runs through mid-July.
2 years ago

Sponsored Articles

house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 reasons you may want to consider apartment life over owning a home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Take this quiz before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t let a ransomware attack get you down | Protect your workplace today with cyber insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Hand turning a thermostat knob to increase savings by decreasing energy consumption. Composite imag...
Lighting Design

5 Lighting Tips to Save Energy and Money in Your Home

Advances in lighting technology make it easier to use smart features to cut costs. Read for tips to save energy by using different lighting strategies in your home.
Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Feds Delay Payday Loan Rule: Here’s What You Should Know