The basics of payday loans in Utah
When taking out a payday loan, borrowers often give the lender a post-dated check or agree to have money taken directly out of their checking account on the due date.
Payday loans may be an option for those who don’t have a good credit score but quickly need cash for a short-term emergency. However, payday loans often charge fees that lead to borrowers paying over 300% APR on their loan.
According to a 2016 report on the payday loan industry from the Office of the Legislative Auditor General of the State of Utah, Utah is one of two states that impose the fewest number of restrictions on payday lenders—also known as deferred deposit lenders.1
The report found that the typical $300 payday loan in Utah will have a 521% annual percentage rate (APR) if it’s repaid in full in two weeks.2
Borrowers may also wind up “rolling over” their payday loan, paying just the fee-portion on the due date and extending the payment of the principal balance while accruing additional fees. This can result in paying even more in fees overall.
1 - See the chart on page 46 https://le.utah.gov/audit/16_04rpt.pdf
2 - See page 11, “Figure 1.1 illustrates a standard payday loan for $300 at 521 annual percentage rate (APR), which is the rate charged by many Utah lenders.”https://le.utah.gov/audit/16_04rpt.pdf
RISE offers installment loans in Utah
An installment loan from RISE could be a better option if you need quick access to cash. You can apply online, and if you’re approved, you could have money in your account within one business day*.
RISE’s installment loans offer many benefits, and they can differ from payday loans in Utah in the following ways:
- A lower interest rate. In Utah, RISE provides loans with a 60% to 299% interest rate.
- Longer terms. You may be offered a repayment term that ranges from 7 to 36 months. Having a longer term could lead to more affordable payments. A shorter term will increase your monthly payment but lead to long-term savings as you’ll repay less money overall.
- Borrow $300 to $5,000. RISE offers loans that range from $300 to $5,000 in Utah, which may be more than you can borrow from a payday lender.
- Build your credit. Many payday lenders don’t report your payments to the big three credit bureaus—Equifax, Experian, and TransUnion. However, if you don’t make payments, they could still send your account to collections, which can hurt your credit. RISE will report your payments to TransUnion and Experian, and making on-time payments could help improve your credit.
- Free credit monitoring. RISE customers get free access to a credit score based on their TransUnion credit report and can get TransUnion credit alerts for free.
- A five-day risk-free guarantee. If you decide you don’t need to borrow money, you can return your loan within five business days and won’t have to pay any fees.
Is RISE the best option if you need to borrow money?
RISE’s installment loans in Utah can be an expensive form of credit. Credit cards, credit card cash advances, and payday alternative loans from a credit union may offer you a lower interest rate.
However, if you’re working on your credit scores, you may not qualify for the lowest rates. Or, you may not have a high enough credit line to cover your needs.
A RISE loan can be a smarter option than other types of loans, including more expensive payday loans or title loans (a loan that uses your vehicle as collateral).
RISE also offers tools and resources that you can use to understand and improve your credit and build good money habits, which can put you on the track to qualifying for lower-rate loans in the future.