CHICAGO- United Credit Union said it has launched “Second Chance Loans,” a payday loan alternative that “aims to empower credit-challenged members.”
According to the $301.7-million United CU, the program is designed to offer an alternative to high-rate payday loans, which are often used by lower-income households.
“With one of the highest rates of unbanked and underbanked households in the United States, United Credit Union seeks to provide access to capital, credit, and financial services to marginalized groups in the Chicagoland area,” the credit union said.
United Credit Union said the Second Chance Loan allows members to borrow up to $2,500 at a competitive APR for up to 24 months. Borrowers can use the loan to pay off small-dollar collections, establish or re-establish credit history, get out of payday lending cycles, and obtain extra cash for emergencies or unexpected expenses, the CU added.
Empowering Communities
"Our goal is to serve and empower our communities," said United Credit Union CEO Mario Aguirre. "We want our members to feel confident and secure in their finances. The Second Chance Loan addresses inequities in the financial market by providing a safe and reliable loan option to our members. We're here to help, always," said Aguirre. "We believe that everyone deserves the opportunity to achieve financial stability. By providing access to a lower-rate alternative, we hope to help our members break the cycle of high-rate payday loans and achieve their financial goals."
In releasing its new offering, United CU cited a 2019 Federal Reserve Bank of Chicago report, approximately one in five adults in Chicago are underbanked and 7% are unbanked. UCU’s Second Chance Loan is a part of their commitment to provide members with the tools and resources they need to achieve financial stability.
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