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Payday loans have not been received very favorably recently, by either the general populace nor by the legislature. And yet, at QCash, we still see small dollar loans as an important aspect of credit union member health. Why do we continue to hold this viewpoint?
We understand that financial health means different things to different people. Recently, we read a study that claimed that around 44% of Americans couldn’t come up with $400 cash in an emergency. To us, this indicates that most Americans do not have access to an extra influx of money to aid them with anything that might come up. While we might most often think of financial health as a product of income, savings, wealth management, and planning for the future, we know that for many people it means having flexibility and options. They want to know that, regardless of their cash flow, if something comes up that requires a little extra money, they’ll be able to take care of it.
Financial Health is a Road Trip
Everyone’s destination is a little bit different. In the game of Life, some of us want to retire to Millionaire Estates, while others want to retire to Countryside Acres. How we get there will differ, and how the game ends may also be a little different, but in the end, we’re working toward the same goals: a happy life with enough financial stability that can last us.
The road to financial health is also littered with obstacles, pit stops, detours, and—we hope—a few great restaurants. We keep in mind that many hard-working, responsible Americans sometimes struggle to cover sudden costs or loss of income stemming from medical emergencies, car troubles, and job transitions. In such times, it’s better to have options. Safe options. Options that don’t come at the predatory rates endemic to payday loan centers. Options presented by the same people who provide their other banking services. Options that come with the comfort and security that only their credit union can afford them.
Each member’s route to financial health is unique, so we want to offer as many possible routes to success as we can. Whether someone needs it or not, having access to an emergency small dollar loan has helped thousands of credit union members per month. It’s not just for the foreseeable obstacles that pop up—it’s for the nasty surprises. Members can get small, fast loans when they need them most.
At QCash, we also consider small dollar loans a boon to credit unions. It expands the portfolio of services that they can provide, and it keeps credit union members from jeopardizing their financial health by pursuing loans at less-reputable payday loan centers.
We’ve proven that the loans we provide, at the rates we suggest, are a net positive for credit unions. Our service is faster and requires less overhead than traditional payday loan services, which allows us to offer little lifelines to those in need. Nevertheless, we emphasize the financial health of your members, because we understand that healthy members mean a healthy credit union.
If you’d like to read more about credit unions and small-dollar loan programs, follow the links below. Or, if you’re curious about how you can help your credit unions when they need you most, download our Member Crisis Guide.
- What Level of Staffing Do I Need for My Credit Union Small-Dollar Loan Program?
- Overcoming Potential PR Issues from Credit Union Small-Dollar Loan Programs
- The Member Segments Most Affected by Credit Union Small-Dollar Loan Programs
- Measuring the Success of Your Credit Union’s Small-Dollar Loan Program
- Best Practices for Marketing a Credit Union Small-Dollar Loan Program