Learn more about credit unions before taking short term loans

So you’re short on cash and you’re stuck between looming bills and your next pay period, and you think you might have to take out a payday loan – but did you know that relying on a credit union instead could lead to much more affordable lending?

Much like the number of payday advance lenders, there are more credit unions today than there have been in the days before the banking crisis and resultant economic turmoil. However, unlike providers of short term loans, who charge annualised percentage rates as high as 4,000 per cent for a loan, credit unions aren’t out to squeeze every last pound from you; credit unions are not-for-profit, volunteer run financial co-operatives that offers both savings and lending to its members.

In years past, strict guidelines on who can or cannot become a credit union member made it difficult to gain membership, as you had to share a very specific common bond with the group of people the credit union was set up to serve. However, new regulatory reforms have made it much easier to qualify for this common bond, opening the doors of local credit unions to many more people that could benefit from membership.

Obtaining a loan from your local credit union is much less difficult than it is to go to your high street lender and apply for the same loan. Likewise, the interest rates credit unions charge their members are much less exorbitant than those payday lenders charge their customers, which means that you’ll not have to worry about ending up in spiraling debt as a result.

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