Sudbury Credit Union may offer alternative to payday loan companies
Consumers may be able to access loans at much lower rates than payday services
Although the details aren't complete, the Sudbury Credit Union may soon be able to provide customers with payday loans, at a far lower rate than other companies in town.
It follows the lead of the Windsor Family Credit Union, which is offering $100 loans for a charge of $1.42.
In Ontario, a payday loan store can legally charge up to $21 on every $100 borrowed.
Currently, there aren't more affordable options for people in Sudbury to access short-term loans, said Debbie Sokoloskie, the operations manager of the Sudbury Credit Union.
"It's great that Windsor Family Credit Union is offering an alternative to the Windsor community to payday loans because the difference in the cost of borrowing for a member is significantly less than what they'd be paying at a payday store," Sokoloskie said.
Payday borrowers usually trapped in debt cycle
But people who rely on these types of loans often have trouble paying off the debt, no matter how low the charges, said David Reynolds, an insolvency trustee in Sudbury.
"A perfect solution is somebody who goes, 'okay, let's do our budget, let's figure out what we have at the end of the month if we don't do anything extravagant...if we just make ends meet,'" Reynolds said.
Reynolds instead advises people to put extra money aside each month in case of an emergency.
With files from Samantha Lui. Edited/packaged by Casey Stranges