PAYDAY ALTERNATIVE LOANS GRANTED YEAR TO DATE
FOR FEDERALLY CHARTERED U.S. CREDIT UNIONS | DATA AS OF 12.31.22
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- Federally chartered credit unions originated $226.6 million in payday alternative loans in 2022. That’s 29.2% higher than the $175.4 million granted in 2019 and the highest amount since the program’s inception in 2010.
- Borrowers can take out up to $2,000 with repayment terms of up to 12 months. Interest rates can reach as high as 28% APR; however, rates for traditional payday loans can reach into the triple digits.
- The surge in PAL activity in 2022 is a sign that inflation, persistent recession fears, and rising interest rates are squeezing members’ wallets.
- PALs save borrowers hundreds of dollars compared to payday loans, auto-title lending, and rent-to-own agreements. Members that take advantage of this lower-cost alternative can address immediate financial needs with more reasonable terms and, eventually, graduate to traditional financing options.
Note: State-chartered credit unions frequently offer their own small-dollar lending programs; however, the National Credit Union Administration’s PAL program is open only to federal charters, and rules for similar loans from state charters might differ.
How Do You Compare?
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