Salary Advance Loans offer an alternative to payday lending. The Salary Advance Loan Program (SALO) is a new loan product created by credit unions in their desire to serve members and households with short term cash needs, and to help break the payday lending cycle.
The programs typically allow members to take out salary advance loans without having to pay annual percentage interest rates between 200% and 900%. The fees that are required are much less than what is offered at most payday lenders. The SALO program loans will usually have a maximum loan amount of $500-$1000. The minimum amount that can be borrowed is $50 with an interest rate below 18% (many loans are as low as 12%) and they have no
fees that people need to pay. Credit Unions believe that these products provide members a much less expensive way to access emergency funds.
Salary advance loans offer an alternative to payday lending. They can help eliminate many of the potential negative financial impacts of payday loans and lenders on consumers.
Why offer Salary Advance loans?
They are significantly less expensive than traditional payday loans. Borrowers do not have to pay a fee on the cash they borrow, and the interest rates are much lower. Most of the rates offered are 18% APR or lower on their advances.
On a $500 cash loan for 30 days, borrowers will save at least $177 with a Salary Advance Loan from a credit union.
Category: Payday loans