European Payday Lender Crash Highlights Need for Payday Alternatives

European Payday Lender Crash Highlights Need for Payday Alternatives Millennials Fall Prey to the Payday Loan Debt Trap Millennials Fall Prey to the Payday Loan Debt TrapInside Subprime: Sept 11, 2018By Ben MooreA European-based payday lending platform crashed in August after struggling for months to compensate customers for a variety of complaints that plagued the platform. The controversial platform offered short-term payday loans with interest rates reaching an unprecedented 5,800 percent to borrowers with limited options for credit.For years, the payday loan provider received complains over the predatory interest rates that were associated with their loans. During the company’s peak, the Church of England called the company’s business model “morally wrong” and vowed to expand their church-run credit unions throughout the country in order to offer more affordable short-term loans, as well as compete directly with them and other predatory payday lenders. The European payday lenders efforts were viewed as deliberate attempts to target customers with poor or no credit, with astronomical intere st rates intended to keep those customers trapped in a cycle of debt. The platform was  seen as a “toxic symbol of Britain’s household debt crisis”, and the crash left the platform with more than 200,000 customers still owing more than £400 million in short-term loans. Borrowers were asked to keep making payments on their loans despite the company’s demise.In the wake of the payday loan providers collapse, other startups have risen up across Europe to provide an alternative to payday loans for people strapped for cash. One European platform that provides low-wage employees with the ability to withdraw funds from their paychecks prior to payday, has become a prominent platform as it helps low-wage workers skip the wait for payday to access their wages, which is the main draw for borrowing a payday loan. The company earns profits through their transaction fees, charging a small fee per withdrawal, similar to the price of an ATM fee. Peter Briffett, one co-founder and CEO, vi ews his platform as being on a “mission to destroy payday loans” and recognizes that most people cannot “come out of [the] cycle” of payday lending debt due to the high interest rates and fees. While the platform is not accessible to the public, they have has partnered with various employers directly to implement the solution for their employees.  Across the pond in North America, the need to provide alternatives to payday loans has started to become recognized as a necessity to ensure financial health for citizens as well as economic health security. Research has shown that low-wage employees that are provided immediate access to their wages has a direct correlation to increased productivity at work, as well as an improved corporate culture overall. Walmart recognized this and last year partnered with a lending startup to provide their employees with instant access to their salaries. Comcast has started offering short-term loans to employees, with payment installments being deducted from employee paychecks. Other startups have also partnered with employers to provide instant access to wages for employees.  With startups offering alternatives to dangerous, high-interest payday loans, low-wage workers are able to make secure financial decisions for their future.Read the all  Subprime Reports  and check out the following reports including:Alabama |  California |  Delaware |  Georgia |  Idaho |  Illinois |  Mississippi |  Missouri |  Nevada |  New Mexico |  Ohio |  South Carolina |  Texas |  Utah |  WisconsinVisit  OppLoans  on  YouTube  |  Facebook  |  Twitter  |  LinkedIn