When money is tight and you don’t know if you’ll be able to make your rent or keep the lights on, you start looking for ways to find quick cash. You can sell some personal items or ask family members for a loan, but whatever you do, don’t go to a payday lender. It’s a trap that will hold you captive far too long and cost you many times more than you borrow.

These loans are popular because they are extremely easy to get – they don’t require a credit check or collateral. A typical loan is for 14 days and you’re expected to pay it back in full when you receive your next paycheck. However, payday lenders charge a fee of 15% to 20% for every $100 borrowed. For a two-week loan, that works out to an annual interest rate well over 350%. Most payday borrowers can’t pay the loan in full when it becomes due, so they roll it over into another loan and a new finance charge is added to it.

For example, say you borrowed $300 with a 15% finance charge for a two-week period. On your next payday, you would have to pay $345 ($300 x .15) to the payday lender. If you can’t pay it when it’s due and roll it over, you get hit with another finance charge, this time on $345. Now you owe $396.75. If you can’t pay that amount and roll it over again for another two weeks—which happens to many people using payday lenders— you will owe $456.26 on a $300.00 loan in just six weeks.

So, what are your alternatives? Start by asking your family and friends for help. Some may be able to lend you money until you get back on your feet financially. Make it clear to them that you will pay it, perhaps by drawing up terms stating a date you will pay it back in full, or whether you will pay a percentage back on each payday. If they don’t have money to lend, they may be able to help by driving you to work or even letting you move in with them temporarily.

If you are in good standing with UnitedOne Credit Union and have good to excellent credit, you may qualify for an unsecured personal loan. The interest rate will be far better than a payday lender. Even if you don’t have an excellent credit score, talk to one of our loan officers. We may be able to find a workable solution for you.

Know that when you are hit with a financial emergency, there are better options than a payday loan. UnitedOne is committed to helping its members throughout their lives, through the good times and the bad. If you need a loan, talk to us to discuss how we can help you get through a rough patch safely.

About UnitedOne

UnitedOne Credit Union has branches in Manitowoc and Sheboygan, and is open to everyone living or working in Manitowoc, Sheboygan, Kewaunee and Door counties. The credit union serves consumers and small to mid-sized businesses. 

When you join UnitedOne Credit Union, you become a member-owner of a not-for-profit financial institution with a history of success and service dating back more than 80 years. Our "We're here because you're here" philosophy continues to grow our reputation of strength, stability, service, and convenience today. We embrace a successful and straightforward member-owned cooperative mission: meet the financial needs of our members by empowering them with the knowledge to make informed financial decisions. That's the UnitedOne difference. 

To learn more about our services, contact us today! You can book an appointment online to see a Member Service Representative or Mortgage Specialist. You can also call us at 920-684-0361 or 920-451-8222.