With the moratoriums on evictions* and foreclosures expiring this month, predatory lending practices will sadly likely be more prevalent this summer. Given that, we’ve decided to take a pause on our retirement series and revisit our predatory lending series.
*Certain renters in high-transmission areas may still be protected from eviction until October 3rd – review this CDC document for more information!
This week we’ll return and conclude our series on predatory lending and discuss possible alternatives to predatory loans.
The best resource, if feasible, is your own savings account. You don’t have to pay interest when you borrow from yourself! This is why developing emergency savings, by putting aside a regular amount each month or each paycheck, especially when your financial situation is stable, is so critical.
If you’re considering these predatory loan options because you need to repay other loans, working out repayment options with creditors is another consideration. Often when borrowers fall behind on payments they don’t think to contact their creditor to see what options they have. Especially if you’ve been a reliable borrower in the past, and you’re not too far behind, many creditors will provide you feasible repayment options to help you get back on track.
Local, state, and federal agencies and organizations can be invaluable for short-term financial needs as well. Contacting social services and local non-profits and religious institutions can connect you to temporary resource to help you get through your financial rough patch.
Depending on your credit, you may also be eligible for credit union and bank loans, providing you loan products with lower interest rates and less predatory features.
Other options can include salary advances, credit card advances, and loans from friends and family. However, these options aren’t always feasible and are often undesirable for one reason or another. The important thing is to consider all of your options before deciding on the predatory loans we’ve discussed over the past few weeks.
If you have any further questions, please let us know!