Credit Unions are giving the payday loan lenders a run for their money. They are there to help their members get the funds they need. Payday lenders have high APRs compared to credit unions. Doug Fecher, President/CEO of Wright-Patt Credit Union in Fairborn, Ohio, states StretchPay line-of-credit loans save our members $1.5 Million in Payday loan fees per year.
Credit unions offer these loans to their members but certain requirements must be met in order to qualify for these loans. As an added benefit, they also report to Credit Bureaus so they can help members build or repair their credit.
Consumers Union, a nonprofit publisher of Consumer Reports, states that payday loan interest rates can range from 212% to 911%. This is what gets consumers into a vicious circle of never-ending fees.
The National Credit Union Administration has set guidelines that credit unions must follow to ensure their members safety. These guidelines must be met:
- Credit union must give members at least one month to repay the loan.
- Members cannot exceed more than three loans in a six-month period.
Credit unions have become the better alternative to Payday loans and are helping build member loyalty at the same time.
For more information about payday loans or becoming a member, contact the banking professionals of the Valley Federal Credit Union at their Brownsville branch at (956) 546-3108, or their Harlingen branch at (956) 425-5668.