By Sarah McDaniels –
Credit unions are not-for-profit organizations that are owned by their actual members. So, instead of trying to maximize their profits to benefit some third-party shareholder, these organizations use their revenue to deliver lower interest rates and more affordable fees to their members.
Payday-alternative loans are one helpful result of this unique arrangement. These loans typically vary in amount from between $200 and $1,000. They also usually come with repayment terms from one to six months. Due to of federal regulations, credit unions can only charge a maximum interest rate of 28%, which can be a lot lower compared to other alternatives.
Unfortunately, not all credit unions offer these payday-alternative loans. Even if they do, you will usually have to belong to a credit union for at least a month before you will be allowed to apply. In other words, despite their attractive rates, credit unions aren’t likely to offer much help in emergency situations unless you happen to already be a member of one that provides payday-alternative loans. If you are, however, this option can save you a lot of money.