How is Possible different from a traditional payday loan?
Loans from Possible have an annual percentage rate (ple, if you are a Washington resident and borrow $200 from Possible Finance, you will have 4 total repayments over 8 weeks. Each repayment is $ so the total repayment is $230. This equates to a 151% APR. How does this compare to payday lenders and payday loan alternatives?
- Bank overdraft fees equate to a 17,000% APR!
- Suggested tips on payday advance apps can amount to a 730% APR!
- Typical payday loan APRs are 390%
Depending on your qualification and your credit score, you may qualify for the following which will have a lower APR than a loan with Possible Finance:
- Personal loans usually have APRs up to 36% but require credit checks and minimum credit scores
- Credit cards also have lower APRs but will require credit checks and may have additional fees
- Credit union or Payday Alternative Loan (PAL) has specific qualifications and you must be a member of a credit union
- Auto title loans are secured loans usually with 100%+ APRs and short repayment periods that use your car as collateral
Depending on your financial situation, a loan with Possible Finance may not be the best option for you. At Possible, we strive to be the best borrowing option for everyday Americans who need access to cheap short-term financing while building credit for long-term financial health.
There’s a lot to consider when you’re comparing loan options. Short term, small-dollar loans are often lumped together in the same category and thought of as cash advance or payday loans. But friendlier alternatives to payday loans, like Possible, are emerging with technology. How is Possible different from a payday loan?
Application processes
Like payday loan applications, the Possible loan application is quick, easy, and doesn’t require good credit. Payday loans are offered through both storefront lenders and online. It generally takes a few minutes to complete the application and under 15 minutes to receive cash and 1-2 business days to receive money in the bank account. Possible loans are offered through our secure mobile app and can be applied for in under a minute from your phone! Once approved for the loan the money is available to the customer within a few minutes on a debit card or 1-2 business days in the bank account.
Requirements
Both traditional payday lenders and Possible require that applicants have an active checking account, regular income, valid identification, and are at least 18 years of age. Here’s where Possible differs – in addition to these requirements, Possible also requires that applicants’ linked checking accounts have about 3 months of history, income deposits around $750 per month, and a positive bank account balance. Possible uses this additional information to determine the amount applicants can safely borrow without causing them more harm than good. According to the CFPB, “An applicant’s ability to repay a payday loan while meeting their other financial obligations is generally not considered by a payday lender.” Furthermore, many payday lenders heavily incorporate credit checks to assist in their lending decision whereas Possible relies on an internal model through the bank account link.
Borrowing fees
Lending to customers without requiring a credit check is considered risky by some. For this reason, interest rates on payday loans are often exorbitantly high. According to the (CFPB), “A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent.” On the higher end of the spectrum, some payday loan companies charge interest rates of over 700%. That means for a $500 loan, you could end up paying back almost $4000. Possible’s borrowing fee aims to be consumer-friendly at an APR of about 150% on most loans*. Possible realizes that a customer who hasn’t established discover here credit or has bad credit due to financial issues in their past can still be a responsible borrower.