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Credit Unions

Category: Alternatives — Sunday, June 18, 2006

Credit unions are an excellent alternative to payday loans.

Let’s face it - if you are having financial difficulties, things will not improve in one paycheck. In fact, payday lenders are banking on this. They want you to ‘roll over’ the loan by paying only the interest because it increases their profits. That’s why they don’t let you pay off a part of the principle - it is all or nothing.

Credit unions, on the other hand, offer both long and short-term solutions to financial problems

What is a credit union?

A credit union is a financial institution that:

  • is not-for-profit
  • is controlled and owned by members
  • charges lower interest on loans than banks

What short-term solutions can credit unions offer?

Some credit unions offer salary advance loans at 15-18% APR. (The APR on payday loans can range from about 200% to 1500% or more.)

What long-term solutions can credit unions offer?

Many credit unions offer Debt Management Programs - frequently at no charge.

Credit unions are an excellent alternative to payday loans and they are now easier to join because affiliation requirements are less strict.

Credit unions with payday loan alternatives include the Martinsville DuPont Credit Union, the Navy Federal Credit Union, the Nevada Federal Credit Union and the Summit Credit Union.

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