HOUSTON — For nearly 13 years, Key Federal Credit Union has brought an alternative to payday lending to its members and is pleased with the results.
The $41 million credit union has offered its version since 1994, said Virginia Smith, president/CEO. The loan charges 18% in interest, amounts go up to $2,500 and users have up to 18 months to pay it off.
"Pretty impressive considering we've done loans for people that have a 480 credit score," Smith said. "The majority of these loans were under 575."
Smith said the CU has done more than $5.8 million with its payday lending alternative loans, collected $560,000 in interest and has lost $24,000.
Key FCU serves nearly 7,100 members in the health care community.
According to some statistics, payday lenders typically charge between a 390%-780% annual percentage rate on loans.
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