Applicants must have a valid bank account when using the payday loan service. For millions of people who don't use banks to hold money, getting a quick payday loan will be very difficult. The storefront service will ask you to hold a signed check payment on the due date. Online services use bank transfers and debits to process their loans. How will people without a bank account get fast cash? The post office believes they can solve the problem of using short-term loans or service customers without bank accounts.
USPS will provide "postal loans" to help people save money. This does not mean that there are no additional charges, but the postal service does believe that this will be better than paying payday lenders and cash check services. For those who need to increase their cash, this is another option.
For now, those who do not have a bank account but work need to cash the check somewhere. Cash check services require payment, and some places even offer savings accounts to hold funds instead of carrying them. This is a safe way to protect your income, but none is free. USPS wants to offer prepaid cards to consumers who deposit their pay directly into the card. Postal loans are limited to half of the card. What about the cost? How does USPS get service rewards? Payday loan lenders inform their fees in advance. The service has been around for a long time, so most people have at least a basic understanding of how it works.
Everyone who borrows a postal loan must pay 5% until the loan is paid off. Sounds reasonable, and the idea of a loan will help many people save a lot of financial costs. The problem is that the loan cannot be repaid. Payday lenders are fighting every day. You can't directly access someone's salary, you can only collect money by debiting their account. If the money is not in the bank account, the direct lender will have to continue to try, add more fees, and reach an agreement with the borrower that both parties can agree. USPS will have the right to use the full salary of a person. If the loan is not repaid as agreed in the contract, USPS can automatically deduct the payment from the directly deposited salary check and deposit the remaining salary into the card. The borrower will pay any price without compensation and has no chance to solve certain problems.
Banks and credit unions also offer similar services. Their interest rates are lower than typical direct lenders, and people tend to trust institutions more. The idea of an alternative option is great. Let the people decide. Interestingly, the three major banks have decided to withdraw from payday loans. From regulatory issues to customer complaints and payment troubles, the troubles that accompany them far exceed the bargaining range. It seems that people are still in trouble, and borrowers first get the ability to collect money, so they continue to run into trouble. Consumers have no control over their wages. When the borrower uses from
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They retain control at a higher financial cost.
Fund management ultimately depends on each borrower. They will need to use the service that best suits them. Once a postal loan is activated, it will help customers who do not have a bank account. As for the actual postal loan, it has not yet been determined how the borrower will review the service.