You may want to forgo going to a local business for your payday loan needs, as some major banks are now offering that as one of their latest services, and it would be worthwhile to see if they provide lower rates to meet your needs.

Wells Fargo, Fifth Third and US Bank are among three banks now offering the services, although what it costs to use the services at the banks isn’t clear for Wells Fargo and US Bank, at Fifth Third they do have things in place to check out.

For example, at Fifth Third, you can borrow up to $500 if you’ve had a checking account at the bank for at least six months. A fee of 10 percent is the cost of obtaining the loan, which is automatically paid off when you deposit your next paycheck in the account via direct deposit.

Even though the annual percentage rate is still a stiff 120 percent in the case of Fifth Third, it is far less than the costs associated with other providers of payday loans.

A couple of things to consider when taking account using a payday loan service ever, no matter if it’s from a much lower cost program or not, is what is leading you to need the payday loan in the first place.

As the needs can change from person to person, we won’t get into that, but each individual needs to know why they must pay such a high interest rate to get their hard-earned money cashed.

If you can’t change the reasons over the short term, you could start to gradually build up a savings fund so you can cheaply access your money at times like this without the added expenses.

Another option is to use the lowest interest credit card you have (assuming you have one), as even that will be cheaper than a payday loan at the lowest cost provider.

The point isn’t to feel guilty on why you need the payday loan, especially if it’s the only option available for you, but while you’re using them and looking for the best deal, it would be wise to build up your savings so you never have to do it again.

Even if you can only put a little away each check, you are working toward a solution to a problem that will remain long term if you don’t get rid of interest rates hitting you at even the lowest levels of 120 percent or more.

Tags: money management, Payday Loans, Savings Tips

This entry was posted on Sunday, March 7th, 2010 at 8:00 am and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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