Members of six credit unions in Lincoln, Neb., will have anotherway to meet their need for short- term, low-dollar loans aftertheir CUs joined together to start offering an alternative to more expensive payday loansoffered elsewhere.

“Members will now be able to apply and qualify for a $500 smallloan with an annual percentage rate (APR) of 18% with a paybackterm of 60 days in a fast and convenient way without the hassle ofa credit report,” said Dale Springer, CEO of the $70 millionPeoples Choice FCU.

Under the program, credit union members are required to provideproof of income and by federal regulation, are required to be, orhave been, a member of the respective credit union for at least 30days to qualify for the loan.

In addition to Peoples Choice, the five other credit unionscurrently offering the Credit Union QuickCash program include the$145 million Liberty First CU, the $41 million LincOne FCU, the $80million MembersOwn CU, the $23 million Nebraska State Employees CUand the $75 million University of Nebraska FCU.

More Lincoln credit unions may decide to offer the program inthe near future and the Nebraska Credit Union League has said ithopes the program will spread across the state.

“Credit Union QuickCash is a reasonable alternative tohigh-interest, small-dollar loans that yield a financial benefitwhile serving the needs of the community,” said Scott Sullivan, CEOof the Nebraska Credit Union League.

“In addition to the small loan, members will have access tofinancial education and financial counseling at their credit unionif they would like to take advantage of it,” Sullivan said.

The credit unions cited data that shows the average payday loanin Nebraska has up to a 460% annual percentage rate on a $500 loanwith a payback term of up to 34 days. The payback term of theCredit Union Quick Cash loan will be 60 days with no prepaymentpenalty for members wishing to pay off the loan early.