When life throws you a curveball, keeping up on financial commitments can be challenging and stressful. To ease stress during times of crisis and uncertainty, credit unions around the USA have developed a loan that can help struggling families get through the worst of it.
The Lifeline Loan is accessible to qualified individuals as a form of assistance so they can meet their financial obligations with extra cash or a larger line of credit. The Lifeline Loan can save you in a pinch, so It’s important that everyone knows that it exists and how to use it.
What is a Lifeline Loan?
A Lifeline loan is a personal loan that is there to help you meet your financial deadlines and make your life less stressful when you most need stability. They’re the ideal choice for anyone who needs extra money now, for any reason—they aren’t restricted to specific uses.
Need some cash for a dream vacation with your family? How about some much-needed clothes and supplies? The Lifeline Loan has your back with flexible, convenient access to funds. Use your loan funds whenever and wherever you need them, and when you repay your line of credit, the amount you had replenishes.
How Can it Help You during COVID-19?
We’re in the midst of an unprecedented global pandemic, and as unemployment rates continue to climb, Americans are struggling to make ends meet. The Lifeline Loan provides a path out of financial instability and uncertainty so families and individuals can get what they need and make payments when they can.
Lifeline loans are easily accessible through branch lobbies like any loan but also through ATMs and online banking, which make use easy and contact-free during COVID-19. If you end up able to pay off your credit before the bill due date, great! Lifeline loans don’t have prepayment penalties or annual fees.
How Can Your Credit Affect Your Lifeline Loan Eligibility?
When you apply for a Lifeline loan, there’s no credit check or underwriting necessary. It doesn’t matter what your credit was or is now, sometimes people just need a loan and accessibility is what makes the Lifeline loan ideal during hard times.
Pay When You Can
The Lifeline Loan needs to be flexible and accessible to all, so it’s important that the terms are reasonable and forgiving. They process quickly, often with same-day approval, which means that you can immediately begin using your borrowed funds for whatever you need. The maximum amount you can be approved for is equal to your monthly direct deposit into your account, up to $1,500. The maximum loan term for a Lifeline loan is 12 months at a fixed APR of 10% throughout the life of the loan. The minimum monthly payment is 3% of your loan’s balance, which prevents overdrafts.
What is Overdraft Protection?
When you’re paying back a consumer loan from a bank and you accidentally overdraft, you will often be charged a hefty fee of $35 every time it happens. These kinds of fees just present more financial issues for those struggling to make ends meet. Emergencies and other unexpected expenditures happen and overdraft protection prevents causing more financial stress.
Credit unions offer overdraft protection to prevent ATM, check, card, electronic, or wire transactions from occurring when you don’t have enough money in your account to avoid triggering an overdraft fee. Credit union loans have no overdraft fees, so you don’t end up paying more than you can when you’re financially strapped.
Lifeline Loan vs Quick Loans
While Lifeline loans from a credit union will get you funds the same day to use on anything you need, they should not be confused with payday loans. Payday loans are predatory, offering same-day funds only with exorbitantly high interest rates. Payday loan rates vary based on state regulations, but while a Lifeline loan has a fixed APR of 10%, payday loans can push closer to 60 times as much. According to the Center for Responsible Lending, Nevada has a rate of 652%, while some other states come in around 250%.
The reason for this is the expectation that payday loans will be paid back within a few days or weeks, not months. Payday loans increase exponentially in their total cost as the months pass, sometimes driving their borrowers into even more debt than they started with. The Lifeline Loan provides a safer, more fair alternative that will get you the funds you need in the same amount of time, but with low rates and fees for 12 months instead of 12 days.
Pay When You Can with VCU
As a credit union, we want to protect our members, their families, their lifestyles, and their credit, so when the going gets tough, we are there to help.
If you’re struggling financially and you need a personal loan, consider applying for a Lifeline loan from Valley Credit Union. Our specialists will work with you to find the best loan option for you and your family. In order to qualify for a personal loan at our credit union, you must currently be in good standing as part of the community for over 12 months. If you’re not already a member with us, it only takes $5 to open an account.
Credit unions are a better option during a recession because we do not have minimum balance fees or interest rates on regular accounts. Contact us today to learn more about Lifeline loans and how they can help you.