5 ways specialty loans offer your members a better way

Spring is almost here, and with it comes an uptick in commitments and activities for many families. Are your members financially prepared?

Tax returns, youth sports, summer camp, mid-year holidays, home improvement goals—A lot of activity is about to go down in the months ahead, and there are a ton of people out there losing sleep because they don’t know how they’re going to finance it all. That’s where the advantage of specialty loans come in to help members out when the hectic days arrive.

Where the value of specialty loans hits home

A common need for specialty loans during the middle months is family travel. In early June of last year, MassMutual cited a report from the Consumer Spending and Saving Index that nearly half of Americans planned to hit the road and travel last summer, a ten-point increase from 2022. An incredible 36 percent, though, claimed they couldn’t afford it, with Millennials leading that group at 40 percent.

A further reality is many families go with the knee-jerk option of throwing everything on a credit card. That could spell financial disaster this year. According to The Motley Fool, despite inflation cooling off in late 2023, average debt is up in almost every category including credit card debt, household debt, mortgage debt, and auto loan debt.

The fact remains there is a better way for members to finance their spring and summer plans. Credit unions’ specialty loan offerings provide a better, more fundamental, financially-inclusive and healthy option that helps your members get through the coming busy seasons.

Intended to relieve any number of life events or emergencies that may occur this spring and summer, below we highlight five different specialty loan use cases to help your members make the coming seasons everything they wish them to be.

Tax season relief

Small-dollar loans have proven to be invaluable for those working Americans coming up short by the IRS’s mid-April deadline. Credit unions who offer a specialty loan arrangement for their members stand to gain a heavy dose of loyalty and trust from their existing members and may also draw future members from word-of-mouth.

The fact is consumers generally feel overly burdened by their tax debt. According to a 2022 U.S. News and World Report survey, three-quarters of consumers report being at least a little stressed about their tax bill, 21 percent being extremely stressed, and more than a quarter claim they won’t be able to pay their debt on time.

Their worries may be justified. According to the Wall Street Journal, more Americans than ever owe past-due taxes. By the end of 2022, 18.6 million taxpayers owed the IRS $316 billion in overdue taxes, up from $308 billion in 2019, per the agency.

Making your members aware and providing them financial relief during such stressful and uncertain times of year offers yet another opportunity to solve a member’s pain point while also inviting them back to benefit from more products and services in the future.

Home improvement

Through a small-dollar specialty loan from your credit union, members have the opportunity this summer to afford necessary and even imminent renovations that need to be done on their homes. Two benefits from this type of credit union specialty loan is the member receives the funds quickly, and they don’t need to use their home as collateral.

Specialty loans for home improvement remain a solid choice if the member wants to limit additional pressure on their credit cards.

Family vacations

It has been a long winter, and families are champing at the bit to travel. A September 2022 Globe Aware article says that while families want to travel more in 2024, nearly 60 percent are concerned about affordability.

A small-dollar specialty loan gives your members an opportunity to reconnect with each other in ways that get them out of their normal routine. Travel enables families to re-engage and form common experiences again. The fact your credit union gave them that experience can pay dividends sooner and later.

Back-to-school shopping

When summer vacation for the kids is on its way out, your members may start stressing because their children’s clothes no longer fit, are worn thin or out of style, and the school supply list seems to grow longer every year. CBS News reaffirmed this claim, finding that 68 percent of back-to-school shoppers felt stressed in summer 2023 about paying for school supplies.

Whether it’s new clothes or classroom necessities, a small-dollar specialty loan from your credit union helps families take care of their children’s needs, giving them confidence to be their best in the classroom.

Holiday shopping

When the holiday season comes around, it means a lot of things to a lot of people. For millions of parents, that includes figuring out how they’re going to pay for it when they don’t have the budget for it.

In fact, a January 2023 holiday debt survey by Lending Tree found that 35 percent of Americans took on debt to pay for their purchases for the yuletide season. On top of that, 37 percent of respondents claimed they expect to take five months or more to pay off the previous holiday season.

With specialty loans provided by your credit union, members who may be experiencing an account shortfall during the holidays can rest a little easier knowing a trusted loan is accessible, affordable, and offered by an institution they know they can trust.

When you work with the digital QCash CUSO and its specialty loans products, you’re providing your credit union with improved efficiency, more accessibility for your members, and better financial inclusivity for all. Please feel free to go to our Request a Demo page and see for yourself how QCash can help your seasonal loan offerings.