Today many people work jobs with fluctuating paychecks. This uncertainty can make even regular bills feel like an emergency. Those situations are what payday loans market themselves for. But even if you can pay off a loan when your next check arrives, the fees on a payday loan make them an expensive option to consider.
Even is a relatively new financial app that offers an alternative to payday loans by redistributing your paychecks and balancing them out so you’ll always have a set amount come payday.
To do this you’ll need to elect to use Even’s Pay Protection service when you sign up. Pay Protection looks at the previous paychecks that have been deposited into your account and creates an average paycheck based on several factors, including how long you’ve worked at your job, how widely your paychecks vary and how much you spend and save.
For example, if you use Even and have an average paycheck of $400, anything over that amount will be saved and used to boost future paychecks that fall below that average. In a situation where you get below-average paychecks and don’t have any money saved, Even will loan you the money to get up to average and use the excess from future above-average paychecks to pay off that amount.
There’s no interest on the money Even loans – you pay a single subscription fee each week. The fee varies depending on how much you earn, but the average amount is $3. Contrast a $6 fee for a two-week period with the $15 per $100 average for a payday loan, and you can see how Even emerges as an attractive alternative. It also boasts of partnerships with many employers that cover the cost for employees who chose to use Pay Protection.
Even may not be an ideal payday loan alternative if inconsistent paychecks aren’t the primary cause of your financial difficulties. If you turn to payday loans because you aren’t making enough to cover your bills or because you have an emergency expense, Even isn’t a good payday loan alternative. Credit counseling can help you create a debt management plan to manage your bills, and a personal loan, especially through a credit union, is a less costly option than a payday loan if you have a financial emergency.