How small loans can have a huge impact

Throughout life there are situations – life events – where money plays a significant role in the decision-making process, and a positive resolution is dependent on the availability of funds. In certain cases, where the resolution requires more money than what may be available, an already stressful situation can feel frustrating and overwhelming. But what if a financial institution knew their member personally, and was willing to take a look at special situations to see if they could lend a hand (or money) to assist that member? Take a chance on a member with a long standing history and make a difference to them? This is the embodiment of the Credit Union Difference.

Credit unions have long prided themselves on having personalized relationships with their members, sharing affinities based on education, occupations and the community. Recently, some credit unions have been going above and beyond in their traditional lending practices when looking to meet some of their members’ financial needs. They have started offering smaller, more express and niche-type loans, often stemming from the needs within the community it serves. These smaller loans, while not typical, are creating positive results; building both loan portfolios and member appreciation and loyalty.

A recent article from creditunions.com outlined some of the more unique lending strategies being offered to members at a growing list of credit unions. Lending strategies were implemented after a need was identified within their community and member base. Loans were granted for life events such as adoption, the path to citizenship, environmental initiatives, and to help meet the needs of a union worker just joining and learning their trade. Some CUs have even begun to offer an alternative for those dreaded payday loans, where the borrower usually has no viable alternatives and is stuck paying a huge amount of interest and fees.

 

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