50,000 Turn To Payday Lending Alternative
More than 50,000 members of State Employees' Credit Union (SECU) have turned to a payday lending alternative program since it was introduced four years ago.
The credit union said 53,600 members have borrowed via its Salary Advance Loan Program (SALO), which it says is a "low-cost alternative to borrowing from and paying exorbitant fees to payday lenders who are very prevalent in North Carolina."
The SALO loan has an APR of 12%, charges no fees, and allows members to borrow up to $500 per month. Members can repay monthly with funds from their next paycheck.
Seeking to assist members in breaking the payday borrowing cycle, two years ago State Employees' CU launched the SALO Cash Account two years later, a savings account that automatically deducts 5% of the borrowed amount and places it in a savings account for the member to help cover future expenses.
Members that previously had no savings have now put aside over $7.8 million in the account, the credit union, which is the second largest in the U.S., reported.