What is a Payday Loan?
Payday loans are generally high interest loans, for a small amount of money and for a short time. The loans are designed for emergency expenses to be paid off at your next payday. The loans can be a dangerous option. If you don’t pay off the loan in its entirety, you’ll be hit with additional fees and finance charges. According to the CFPB, the cost of a payday loan, or its finance charge, may range from $10 to $30 for every $100 you borrow. “A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400%,” the agency notes. Contact your local United Finance office to discuss alternatives to a dangerous payday loan.
Traditional installment loans are a good alternative
Installment loans are a type of loan that you repay through regular, monthly payments. Unlike payday and title loans, they don’t require a single lump-sum payment that many borrowers can’t afford. Installment loans spread out the cost, making them a more affordable alternative for many borrowers. Understand the facts and risks of different types of loans before you commit. United Finance offers traditional installment loans and has loan officers available at every location to discuss your needs.
United Finance Co. offers an alternative to high cost title and payday loans
As a traditional installment lender our loans offer lower rates with significantly higher levels of safety and affordability.
United Finance Co. assesses a borrower’s ability to repay a loan by calculating a monthly debt ratio which compares net income to current obligations to ensure the proposed installment payments can be met through the borrower’s monthly cash flow. Title and payday lenders do not assess this ability to repay, relying instead on collateral value or access to a borrowers bank account as their assurance that the loan will be repaid. Because of our ability to repay test and other underwriting criteria United Finance Co. works to provide you a loan you can afford.
United Finance Co. offers all borrowers the ability to cancel their loan at no cost if they are unhappy for any reason within 30 days. We are unaware of any title lenders, or for that matter any other financial institution who offer this option.
United Finance Co. offers simple interest loans that are fully amortized and repaid in manageable monthly installments made up of both principle and interest. Title and payday lenders typically structure loans with balloon payments on very short terms. If a borrower cannot afford to repay the loan in full they are left with no option but to refinance that loan. This results in what regulators call the “cycle of debt,” in which the entire balance of an initial loan is refinance multiple times, to the borrowers detriment.
United Finance Co. reports borrower’s credit history to all three major credit bureaus. This allows borrowers to establish creditworthiness and gives them access to more future credit options, often at even lower rates. Title and payday lenders do not typically report credit history.
Each United Finance branch is situated in the community it serves to provide a highly personal level of service to our valued customers. We invite you to call or visit one of our branches today to discuss how we can help you with your loan needs.
Bad credit boosts
The best way to repair bad credit is to be responsible over an extended period of time. Pay on time, every time, and you’re on your way to better credit:
- Work with a lender, like United Finance Co., that understands the implications of poor credit. We report rigorously to the credit bureaus.
- Use an online bill payment service to schedule your bills to be paid automatically the day before your due date.
- Get a savings account at the same time as the loan.
- If you run into a situation where you know you’ll have trouble paying your monthly amount, contact United Finance immediately to discuss options to reduce the impact on your credit score.