Whether you need to pay a bill, fill a costly prescription, pay for a car repair or take care of some other expense, a payday loan is a source of fast cash. You can apply, get cash in hand and go about your merry way. But is that the best option?
Not necessarily. Read on to learn why and discover alternatives that may be a better fit for you and your budget.
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Options For Payday Loans in Alaska
Payday loans cater to cash strapped consumers who struggle to qualify for traditional loan products. You can apply and, if approved, have the cash in hand within 24 hours in most cases
If you accept the loan, you will provide the lender with a personal check or your account information and authorize them to draw the total loan amount and finance charges on the due date. In most instances, payday loans are due on your next payday.
In the state of Alaska, payday lenders are regulated by the Division of Banking and Securities.
The eligibility criteria for payday loans in Alaska vary by lender. You should be eligible if you meet the following criteria:
- Are at least 18 years of age
- Have a physical address in Alaska and are a legal resident
- Have a steady, verifiable source of income
Prepare to provide a copy of your government-issued photo identification or driver’s license, email address, phone number, Social Security number, proof of income and a blank check or your banking information.
Lender will pull your credit– Credit checks aren’t required by most payday lenders unless you’re seeking a long-term installment loan. Consequently, the interest and fees are higher as these loans pose more risk to the lender.
Stipulations – Borrowers are limited to a single cash advance at a time, and there’s a mandatory cooling-off period of 14 days between loans.
Max Loan Amount – Payday lenders are permitted to offer loans of up to $500 with a minimum repayment period of 14 days. You will also be responsible for interest and fees, which are as follows:
- Loan origination fee: up to $5 (and nonrefundable)
- Interest: the lower of 15 percent of the total amount advanced or $15 per $100 advanced
Also, consider the cost to refinance if you extend the loan. Additional interest and fees apply and can result in even more strain on your finances if you continue to roll the loan over each pay period until you can afford to pay it off.
Alaska law permits 2 loan renewals, and the balance must be paid in full after this point.
Penalties – Still unable to repay the loan after 2 renewals? Or maybe you forgot to notify the lender and they attempted to process your postdated check for payment?
- You may be subject to additional fees by the payday lender, as specified in the original contract. Also, be mindful of the charges your financial institution may assess for the returned payment.
- Under Alaska law, the payday lender is also required to reach out by phone or mail to discuss the delinquent loan and offer a payment plan. You’ll be given up to 6 months, depending on the lender, to repay what you owe (including interest and fees).
- If you accept a payment plan, prepare to pay 5 percent of the balance right away. But know that the lender is prohibited from assessing additional fees.
- Defaulting on the payment arrangement or ignoring the payday lender altogether could result in escalated collection activity. The account could be sold to a collection agency and reported to the credit bureaus, which hurts your credit rating.
- You may also be subject to damages and additional costs as ordered by the court of law of up to $700 (not including the total amount owed).
Payday Loan Alternatives in Alaska
While payday loans are a source of fast cash, they should only be used if other options aren’t available. Consider these low-cost payday loan alternatives for residents of Alaska.
Instacash is a zero-interest option from MoneyLion. You can get an advance of up to $250 in just minutes with no strings attached and repay what you owe in a couple of weeks.
There are no credit checks or lengthy applications. So, if you’re worried you won’t be approved due to a less than perfect credit score, don’t be.
Once your profile is set up, request the amount you want to advance (up to the limit you’re approved for) and the funds will be on their way. Plus, MoneyLion is mobile-friendly with a free mobile app, and you can get the money you need in your account 24/7, even while on the go.
Credit Builder Loans
Would you prefer a loan of a little more than $250 that works hard to boost your credit health? MoneyLion also offers a credit builder loan of up to $1,000, even if your credit isn’t great.
Unlike most credit builder loans from other financial institutions, you’ll get a portion of the cash right away. You might even get all of it. It depends on your financial factors as detected in your linked bank account. If you don’t get it all right away, don’t worry, the remainder is placed in a Credit Reserve Account and earns interest while you repay the loan.
The affordable monthly payments are automatically deducted from your bank account. MoneyLion also reports account activity to Experian, Equifax and TransUnion, so your credit score will grow with your money.
You can give the credit builder loan a try by signing up for a Credit Builder Plus membership for $19.99 per month. It unlocks the door to a low-interest credit builder loan, fee-free bank account, Instacash and managed investing.
Get the Fast Cash You Need Today!
Payday loans offer quick fixes to your money woes but can have severe consequences for your finances over time. The lenders are more than willing to give you a loan but aren’t quite as understanding when it’s time for you to cough up the cash you owe.
Don’t settle for an expensive loan that could be tough to repay. Consider the alternatives from MoneyLion to find the relief you need. Instacash and the Credit Builder Loans are perfect for getting the cash you need without spending a fortune in interest.
Sign up today to access these incredible loan products and so much more!