Choosing between payday lender or credit union is no-brainer

If you’re in a financial bind that sees you having to make the choice between using a payday loan provider or seeking out your local credit union, the decision should be a no-brainer.

An increasing number of reports over the past months – and even years – have revealed just how damaging it can be to your financial health to take out short term loans from a payday lender, even as more and more Brits are turning to these payday advance providers to provide financial solutions. Payday lending might be useful for a one-time occurrence in an emergency, but too many people are using payday loans over and over again, only to find that the high interest rates associated with these loans make payday lending an unsustainable choice.

So what can you do instead if you’re looking over your finances and you fear you’ve got some longer-term cash flow problems? The answer may be found by looking into your local credit union for a low-interest rate loan, especially since credit unions are legally bound to charge no more than a 26.8 per cent annual percentage rate – unlike payday lenders, who have no upward cap and can oftentimes charge more than 4,000 per cent in interest!

It seems mad to sign over so much cash to a payday lender when credit unions are so much more affordable, yet many don’t even consider their local credit union because they think they don’t qualify. Well, recent regulatory changes have modified the way credit unions work, making it much easier for a wider range of Brits to qualify for membership, so don’t think your only choice is to throw in with an expensive payday lender when you don’t have to.

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