If you borrow $200 for a month at $17.50 per $100, you'll pay $70 for a $200 four-week loan. This equals an annual percentage rate (APR) of 457%. If you cannot afford to repay the loan, it automatically renews at the same rate. Such a loan can get out of hand very easily.

For those who sign up online, it is typically set up so the lender deposits the money directly into your account. This might sound convenient at first, but it means you’ve also given the lender access to your account so the loan amount and fees can be automatically withdrawn in two weeks, with or without your consent. If you have outstanding checks, you may now begin to accumulate additional fees for non-sufficient funds. You have now lost control of your account.

What’s the answer? SESLOC checking offers a $300 Overdraft Line of Credit. It's far safer, and it's simple to apply. With Overdraft Protection, you write a check and have an instant loan. (Higher limits are available upon credit approval.) The balance on your Line of Credit appears on your next regular account statement and can easily be repaid in person or through an online transfer. With a 16% APR, a one-month loan of $200 would cost approximately $2.67 in interest*. You save over $67!

Why take the risks and pay the high price when you have a friendly Credit Union to help?

*Estimated interest is based on a 30-day month. Actual interest is calculated from the day of the loan advance to the day of repayment, which may be fewer than 30 days.  Rates for a regular line of credit start as low as 10.9% APR, which could reduce the amount of interest paid. Rates are based on your Earned Rate Lending score.

< Back to Financial Articles