Short-term loans are in demand. According to a recent Wall Street Journal report, payday lender and pawn shop share prices jumped in October. Some credit unions are taking this opportunity to provide similar products, but at a lower cost and with a different philosophy in mind. While payday lenders encourage repetitive short-term lending, credit unions present short-term loans as emergency-only solutions.
Credit unions that offer short-term, high-interest loans valued anywhere from $1,000 to below $500 recognize the product is both risky and low on profits. But they’re on their menus to fulfill members’ needs, and hopefully serve as stepping stones for members aiming to improve their financial situations and move onto lower-cost loan products, CU executives say.
The Lincoln, Neb.-based, $145.2 million Liberty First Credit Union is one of six Nebraska CUs participating in QuickCash, a short-term loan program organized by the Nebraska Credit Union League. The QuickCash loan is a $500 loan that comes with a flat fee of $20, 18% interest rate and pay-back term of 60 days. To qualify, the borrower must have been a member of the credit union for at least 30 days and provide proof of income. A credit report is not required, and there’s no penalty for paying the loan off early.
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Natasha Chilingerian
Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.
