How Credit Unions Help You Dodge Predatory Lending Traps

Low-Cost Payday Loans: Are they a myth?

You’ve most likely heard about ‘predator’ lending, or you might have already experienced the wrath of a relentless payday lender.

Several people are under the impression that such institutions are their only hope when it comes to rebuilding their credit or borrowing money. Sadly, these types of lenders feed on those with bad credit—specifically people who’ve already been turned down for loans.

Predatory Lending

What you might not be aware of is that ASI and other credit unions typically supply specialized lending programs that are designed especially for customers tuck in stressful situations like this. Believe it or not, these lending programs can aid in rebuilding your credit without the excessive fees.

The Payday Loan Problem

Payday loan institutions advertise their services to those with not-so-perfect credit, which allows them easy access to funds. The sad reality is that several people who sign these payday loan contracts become stuck in a never-ending cycle of debt. Rather than fixing their financial situation, such loans usually just worsen the situation.

The National Consumer Law Center calls attention to the fact that payday loan fees can be ridiculously high. Some of these lenders purposefully take advantage of their customers who are just trying to get out of debt. Lax usury laws allow these companies to continue their practices even though they sometimes border on unethical.

Multiple entities—from individual states to consumer advocacy groups—are trying to tighten regulations on these predacious payday lenders. Meanwhile, consumers are firmly urged to steer clear of such contracts with these businesses.

Credit Builder Loans

People with low credit scores are usually the ones that payday loans attract. Instead of helping these people get their credit back on good terms, the payday loan process usually turns into a revolving door, making it even harder to keep your head above water. At ASI Federal Credit Union, personalized assistance and loan products are arranged to assist you in building your credit at a low cost.

Programs to Assist

Simply attaining an average checking account at a credit union can be very helpful in avoiding payday loan traps. The power to make online payments, watch your expenses, and have access 24/7 to your account helps you stay up-to-date with your expenses and bills. ASI as well as other credit unions also allow for simple transfers between accounts and provide overdraft protection.

Stretch Plan

With ASI’s Stretch Plan, you begin with a small loan amounting up to $500. No credit at all is required for this low-interest loan. You can establish credit by making your payments on time, and ultimately changeover to a conventional loan. The entire point is to put you back on track to establish good credit, all the while saving you money.

Asset Builder Loan

The Asset Builder loan is a great option for those who need to borrow more. The only requirement is at the least, $15 in savings for each $1000 that is borrowed. This is a fantastic way to finance a small purchase, and some day, as your credit builds, open up your access to greater amounts.

Credit Enhancement Plan

The Credit Enhancement Plan is just what it sounds like. It is a wonderful way to acquire a low-interest loan while simultaneously increasing your credit score. With a low weekly fee, you will be able to access a line of credit up to $3,000.

Several people who have been turned down for loans in the past are likely to be hesitant when apply for these programs, under the impression that they won’t qualify. However, that’s what makes these programs so great—they’re designed for people who need assistance in reaching a better place financially. Contact ASI Federal Credit Union to learn more about their harmless alternatives to predacious payday loans.