State Employees' Credit Union in Raleigh, N.C., is cutting interest rates on its Salary Advance Loan by as much as 50%.

For many regular users, the credit union will lower the standard 12% interest rate to a share secured rate of 5.5% for members who have saved at least $500 under the savings component of the program. The change is projected to save the 100,000 monthly users more than $400,000 in interest costs.

State Employees' Credit Union is changing the savings component to require members to raise the amount they put aside to 7% from 5%.

A typical $500 loan advance will result in a savings deposit of $35 as opposed to $25.

The credit union said that it is considering a $100 minimum-balance certificate of deposit program as a future improvement to the Salary Advance Loan program.

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