In an effort to better serve low- and middle-income members facing a financial emergency, Providence Federal Credit Union (Providence FCU) has launched a simple, safe alternative to costly, higher-rate online lenders. The credit union’s new Care Giver Loan will provide members with non-prime credit or no credit history, more affordable terms than typical payday loans, as well as features that make it easier to save for emergencies in the future.
In addition to better interest rates, longer repayment times and the ability to borrow more than a typical payday loan, Providence FCU’s Care Giver Loan is built on a unique payment structure that pays off the loan while simultaneously creating and building an emergency savings account. The intent is to resolve the immediate need while creating a savings buffer to help the member navigate future unexpected expenses.
“Everyone knows what it’s like to experience a sudden financial hardship, like an expensive car repair or unexpected medical bill,” said Providence FCU President & CEO Shirley Cate. “When we met with Providence St. Joseph, they shared our vision of enhancing financial wellness by creating an easier, smarter solution to fix the needs of today and plan for the needs of tomorrow.”
According to the CFPB, the average two-week payday loan with a $15 per $100 fee has an annual percentage rate (APR) of nearly 400 percent. In contrast, Providence FCU’s Care Giver Loan can carry an APR as low 9.99 percent, and members may have between 90 days and 12 months to pay it back.
“Unlike payday loans and high-rate online lenders who rely on high rates and repeat lending business, our intent is to help the Providence St. Joseph employees save their own hard-earned money for emergencies and minimize debt,” said Cate. “If those emergencies outweigh savings, PFCU will be there to help.”
To learn more about Providence FCU’s new Care Giver Loan, visit: https://www.providencecu.org/