How Do QCash Small Dollar Loans Help Member Health?

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.

Institutional Health

 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.

 

Are QCash and Payday Loans the Same Thing?

What are the Benefits of Credit Union Payday Lending?

Comment on this post

What are the Pros and Cons of Partnering with QCash Small Dollar Lending?

Introducing any new technology to a tried-and-true sector is a recipe for radical change. Generally, the change is for the positive, but that doesn’t mean that there aren’t any drawbacks to innovation. The question is when partnering with financial technology companies, what do you give, and what do you get?

When you’re on the front lines of innovation—the cutting edge, if you will—adaptability is key. At QCash, we understand that strategy, technology, and evolution are primary concerns for staying alive and viable. Imagine our surprise, then, when we heard about the new battlefront technology: the double-edged sword. A blade that drastically increases versatility, but that also cuts both ways. It was a game changer, to be sure; however, it presented ways to hurt us as well, if we weren’t careful.

Fortunately, with respect to financial technology, we’ve had time to understand a little about double-edged swords. We realize that we can’t continue to provide bleeding-edge, innovative technology and services without disrupting elements of standard banking and credit union operations. With that said, let’s take a look at the drawbacks of partnering with an experienced fintech company.

The Cons of Partnering with QCash

Part of the digital transformation package means embracing new technology. Before we talk about how that benefits you, we should consider the full impact that it might have.

Whereas most credit unions may be accustomed to learning new processes and practices every so often, fintech companies focus only on providing value through the specific services that they provide. As a result, they learn to reimagine, fine tune, and change gears quickly. New developments come faster than regulations do. Often, a fintech company will implement new technology or protocols every 45 or 90 days; many credit unions are used to adapting to new things only every six months or so. This can present a significant increase to changes to workload or style for credit unions.

Essentially, the downside to partnering with a fintech like QCash is that we tend to push forward rapidly with innovation, which can require testing, education, and fine-tuning. Consistently reevaluating best practices isn’t easy. The pace can be rather fast.

The Pros of Partnering with QCash 

The pros of partnering with a fintech largely speak for themselves. Fintechs provide access to data, services, protection, planning, and more, all that wouldn’t be available or feasible otherwise. With QCash, we offer small-dollar loans at reasonable rates to help protect your members from predatory payday lenders who charge exorbitant interest rates. We also do it with a high degree of demonstrable protection and moderate benefit to your credit union.

Beyond that, fintechs like QCash offer something a little less tangible, but no less important. First, we can help you get to market to serve your members faster than you could do yourself. Developing and testing new technology takes time when you have so many other things to consider, so fintechs are able to focus intensely on perfecting the service or product at hand.

Fintechs also ensure that their products and services are highly integrated so that credit unions are able to focus on daily operations rather than worrying too much about the development and integration of new technologies. They package their offerings so that they have a minimal net impact on day-to-day minutiae, but a maximal positive impact on productivity and member services.

What Interest Rate Should a Small Dollar Payday Loan Program Charge?

QCash Payday vs Small Dollar Loans: What’s the Difference?

Comment on this post

The Importance of Promoting Small-Dollar Lending and Employee Wellness.

By Ben Morales, CEO of QCash Financial

In a recent Prudential survey regarding consumers’ perspectives on financial wellness, only 22 percent of individuals in the United States described themselves as feeling financially secure. Employers such as credit unions have a stake in this because the impact of employee financial instability does not stop at the company door. Many credit unions were and continue to be founded to serve groups of people who had a common interest or bond, such as an employer. These were called select employer groups (SEGS). Promoting employees’ and SEGs’ financial wellness should be an important business objective for credit unions, since it has a negative impact on employee productivity in the short-term, and eventually employees’ retirement preparedness. Employees without sufficient financial stability often turn to expensive payday loans to manage their cash flow issues, which eventually creates a cycle of debt that adversely impacts their productivity, morale and financial wellness.

Benefits to credit unions as employers

Many credit unions and employers in general are unaware of the potential benefits of promoting employees’ financial wellness. According to Prudential, studies have shown that better financial wellness equates to increased productivity in the workplace. Roughly 44 percent of employees worry about finances at work, and 46 percent spend between two and three hours a week on personal financial matters; see “Power of the Wellness Effect” . Financial instability also impacts employees’ potential for retirement.  In 2012, employees withdrew $70 billion in from retirement accounts before reaching retirement age. This equates to 59 percent of employers’ matching dollars contributed to those accounts that same year; “Power of the Wellness Effect“. Even a one-year increase in retirement age costs employers about as much as sick and personal leave days combined. When credit unions promote employees’ short-term financial stability, it translates to cost savings when employees get closer to retirement.

What can credit unions do?

As providers of employee benefits, credit unions are viewed by their employees as trusted partners who can help employees achieve financial wellness.  Traditional workplace benefits programs are expanding to include new, complementary financial wellness approaches.  These programs focus on foundational financial issues, such as budgeting, debt management, saving and investing, and protecting against key financial risks. Credit unions may be familiar with offering SEGs paycheck advance programs, but many organizations are unable to support them. Alliances with trusted partners to offer employee small-dollar lending programs that provide an alternative to traditional payday lending can fill this need. According to PEW Charitable Trusts, more than 12 million Americans turn to payday loans annually, demonstrating a strong need for better solutions to these expensive products.  Employees with access to instant liquidity solutions, such as inexpensive small-dollar loan products are often able to budget and manage debt more effectively.

 

Defining these goals

In order to reach financial wellness, consumers must first be in control of their day-to-day financial needs. This often involves creating monthly and annual budgets based on income and expenses, then limiting their expenditures to remain within the budget. Controlling day-to-day needs also means consumers are financially prepared to cover an unexpected expense on short notice. Many times, a one-time unexpected expense of even a few hundred dollars can completely derail this financial stability, causing consumers to turn to payday lenders for their financial needs. Achieving important financial goals of saving or making the move from renting to owning a home can often get sidetracked by these unexpected expenses, which can be compounded by the cost of payday loans. This frequently causes the next unexpected expense to have an even more profound impact. The final element of financial wellness is protecting against key financial risks, such as an economic downturn, the loss of a job or a serious illness, which is extremely difficult when consumers are living hand-to-mouth.

Short-term stability is an important element of an employees’ overall financial wellness. Employees with access to small-dollar lending solutions through their trusted credit unions have better opportunities to manage their short-term financial goals, which enables them to achieve long-term financial goals. As financially stable individuals, employees are better equipped to focus on work and can retire on time. Small-dollar lending is an important part of this equation and can have a profound impact on employees’ financial health.

 

QCash Payday vs Small Dollar Loans: What’s the Difference?

If Payday Lenders Disappear, Will Americans Survive?


Ben Morales is the CEO of QCash Financial. QCash Financial is a CUSO providing automated, cloud-based, omni-channel small-dollar lending technology that enables financial institutions to provide short-term loans quickly to the people they serve. QCash Financial, a wholly owned subsidiary of WSECU in Olympia, Wash., started as a short-term loan solution for the credit union’s members in 2004.

Comment on this post