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Untitled Document
The KEMBA StretchPay Loan
Do you need a helping hand until you receive your next paycheck? KEMBA's StretchPay Loan is a great alternative to payday lenders. The KEMBA StretchPay Loan is designed as an option for you to use instead of borrowing from a for-profit payday lender.
Payday Lenders vs. KEMBA
Unexpected events can happen at anytime, to anyone. When you are in a pinch and payday is just too far away, you may consider a payday loan from a commercial payday lender.
A payday loan, or cash advance, is a small, short-term loan typically used to cover a borrower's urgent expenses until they receive their next paycheck. Interest rates of typical loans from payday lenders can range from 390% to 900%. But as a member of KEMBA, you may qualify for a StretchPay Loan with a low 18% APR.
Compare the rates of a standard commercial payday lender to those of KEMBA:
| |
Interest & Fees |
Loan Amount |
Annual Percentage Rate |
Term |
Total Finance Charges |
| Sample Commercial
Payday Lender |
$15 fee per $100 borrowed for each
14-day term |
$500 |
391.07% |
28 days |
$150.00 |
|
| KEMBA StretchPay Loan |
18% APR, plus a $35 per-year enrollment fee |
$500 |
18.00% |
30 days |
$7.40 |
|
On a $500 loan you save
(not including annual enrollment fee of $35) |
$142.60 |
| *Source: http://www.ohiocreditunions.org |
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How they work
To receive a payday loan, the borrower traditionally writes a personal check that is held for future deposit or electronic access to the borrower's bank account. Borrowers write a personal check for the amount borrowed, plus the finance charge and then receive cash.
Payday lenders will hold the borrowers check until the next payday when their loan and the finance charges must be paid at one time. To pay a loan, borrowers usually can redeem the check for cash, allow the check to be deposited at the bank, or just pay the finance charge to roll the loan over for another pay period.
Your Alternative: The KEMBA StretchPay Loan
KEMBA’s StretchPay Loan is a smart alternative to the typical commercial payday loan process. The KEMBA StretchPay Loan is available as a $250 loan for new borrowers or $500 for borrowers with 12 months of good history at the $250 level. Regardless of the loan amount, advances must be paid in full within 30 days at a low 18.00% APR*.
We understand that life can be unpredictable and as your credit union, we want to help offer you the stability you need to get you through life’s tough times. Please contact us at 614.235.2395 or 800.282.6420, option 4, or visit one of our nine convenient branches today to find out if a StretchPay Loan is the right option for you.
*APR = Annual Percentage Rate. The loan is offered to members in good standing, 18 years of age and older who have been KEMBA members for at least 90 days with no Chexsystems record during the past 12 months and are not in the process of filing for bankruptcy. No minimum credit score required. Applicants must be employed by the same employer for a period of no less than six months or be receiving verifiable fixed income for a period of at least six months. $35 annual fee for a $250 loan and $70 annual fee for a $500 loan.
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