US Bank has introduced a new loan product called Simple Loan to help customers meet short-term financial requirements.
The offering will allow US Bank checking account customers to borrow up to $1,000. They can then repay it over three months in three fixed instalments.
The borrowed amount will be available immediately to the customers.
It will carry a simplified pricing of $12 for every $100 loaned amount when auto-paid through a US Bank checking account. The amount increases to $15 for every $100, if paid manually.
The bank noted that it will report the loan amount to credit agencies to help customers develop their credit rating.
The need for Simple Loan
US Bank Community Advisory Committee member Paul Woodruff said: “Simple Loan is straightforward, transparent and more affordable than many other products in the market.
“It meets a critical credit need for customers who might otherwise be forced to seek a loan that can carry interest charges of more than several hundred percent.
“People need access to small-dollar credit. US Bank is answering the call and providing a pathway for customers to save money and meet their needs.”
The Simple Loan product was devised in close co-ordination with the regulators. It was rolled out following successful testing with selected customers in 2016 and 2017.
Every customer can apply for one Simple Loan at a time. They can again apply after repaying the previous loan amount after a gap of 30 days.
The overall service will be available through the US Bank app or online banking services.