Do You Have Bad Credit?
Did you know that you can get credit union personal loans? Personal Loans come in all sizes. The smallest of which are short-term, unsecured loans, commonly referred to as payday loans. The laws have changed enabling credit unions to participate in this style of lending more competitively than they could have previously.
When your financial situation gets difficult, you need to consider all of your options. After trying to secure a collateral based loan, you may need to consider getting bad credit loans. If you are a member of a credit union, chances are, they now offer credit union payday loans.
Regardless of the high interest rate, credit union personal loans will allow you to get cash now. You will have the knowledge that your other debts can be paid off with this short term financing option. You can use the proceeds from credit union personal loans for any reason. The cash from these loans may be used to consolidate your other debts, such as high interest credit card debts, into one fixed rate loan. You can usually choose a term up to as many as 60 months or more on longer term personal loans from the credit union. However the credit union personal loans, like most other loans of this type are of shorter duration. Usually, these loans are for a very short period – typically somewhere between two weeks and three months. (Payday loans via the credit unions must be at least 1 month long, more on that in the next section…)
An article in the Washington Post indicates that Federal regulators have modified their rules governing loans thus enabling Credit Unions to compete with the online payday loan lenders by offering more favorable terms.
Credit Union Personal Loans Regulations
How Long Can Credit Union Personal Loans Be?
The rules state that short term credit unions personal loans must be at least one month in duration (as indicated above, many payday loan lenders offer loans that must be repaid within 14 or 21 days).
Rates For Credit Union Personal Loans
The credit unions used to be forced to charge no more than 18% in interest on short-term personal loans. The new regulations allow them to charge as much as 28%. This obviously makes credit union payday loans considerably more financially lucrative for the credit unions.
Do You Have Bad Credit?
A Word Of Warning About Payday Loans
Although credit unions are now offering these types of loans, they should still not be considered your first option. The interest rates that are being charged on these loans is amongst the highest allowable by law. In fact, a short-term unsecured loan (via a credit union or by a traditional payday loan lender) can result in incredibly high annualized interest charges. Again, referring back to the Washington Post article, they used a Utah-based credit union as an example to illustrate this point. This particular Credit Union was offering short-term loans that only charged $12 in fees. While this might seem benign, when you annualized that $12, it comes to 876%. This particular Credit Union that is being used for illustration purposes is not alone in their practices. In fact, there are many Credit Unions charging these types of fees on signature loans.
Where To Look For Credit Union Personal Loans
When searching for a payday loan, you should investigate all financial institutions including banks and debt consolidation institutions. While searching for a loan, don’t forget about your credit union. If you are a teacher, firefighter, police officer, postal employee, you probably have the opportunity to join a credit union. Many other industries also offer credit unions to their employees. Credit unions often offer lower interest rates than other lending institutions.
Of course, a payday loan should be your last option. Exhaust every other possible means of obtaining money before you consider these types of loans. As we have indicated in several other stores, unsecured signature loans are very expensive to obtain. Furthermore most people who obtain these kinds of loans usually have a very difficult time de-tangling themselves from these debt instruments.
If you do go ahead any secure a credit union payday loan, or from anywhere else for that matter, make sure to check and see what the fee structure is for these loans and how long you have to repay the loan. It is likely that the rates that are offered at the credit union for any payday loan will be favorable as compared with other payday loan lenders, however, these rates are still so high that, if at all possible, they should be avoided.
We can not stress this enough. If you have an alternative means of obtaining cash, go with that. The terms for these types of loans are usually amongst the highest. Do everything that you can to avoid getting involved with these loans. But if you have no other choice and need to accept these loans, check with your credit union. first.
Credit unions offer a wide variety of personal loans. You can find credit union auto loans, credit union personal loans, home mortgages (for new purchases as well as refinances). But now you can also credit union payday loans among the credit union personal loans. When looking for a loan, check out your credit union. Credit union loans usually have some of the lowest interest rates. However, before you just accept a credit union signature loan, check to see if your credit union offers something other than a credit union payday loan. Remember, payday loans are very expensive. The credit union personal loan rates for other loans that they offer are almost certainly going to be more favorable than credit union payday loans. If you have to get one, make sure to check with your credit union to see if they offer signature loans. If they do offer them, fill out the application. Chances are the interest rate at the credit union will be better than at other lending institutions. So take the opportunity to lower your overall payments and get out of debt by consolidating your debt payments with credit union personal loans..
Do You Have Bad Credit?
- Charge you late fees
- Send your account to a collection agency
- Report your information to a consumer reporting agency, which may negatively affect your credit score
- Offer to renew, extend or refinance your loan, which may cause you to incur additional fees, charges and interest
