Payday Loan Times

Ohio credit unions have designed StretchPay, a system with terms and conditions that are straightforward, transparent and easy to understand. Its goal is to work with members to avoid problems like those seen in other financial sectors.

With StretchPay, a credit-union member pays a $35 fee for access to a $250 line of credit for 12 months. He or she can take out a $250 personal loan at usually no more than an 18 percent annual rate (or less than $4 per 30-day period) and must repay the entire balance within 30 days.

As long as the balance is repaid every 30 days, he or she is entitled to take out a subsequent $250 loan.

Let’s assume a borrower takes out a $250 loan seven times over 12 months. The cost would be $61 (the annual fee of $35, plus $26 in interest, which could be less if advances are paid back in less than 30 days). This is dramatically different than the 391 percent APR some fast payday advance lenders charge.

The reasonably priced StretchPay loan program is coupled with the opportunity for credit-union members to receive financial counseling and education, thus helping the most financially vulnerable to begin building savings and assets.

As more families find it difficult or impossible to make ends meet until the next paycheck, credit unions are proud to help members with easy access to an affordable, instant cash loan, helping them get ahead and on the road to economic empowerment.

It’s what credit unions - not-for-profit, member-owned financial cooperatives - have done for working Americans since the 1930s.