The Truth About Payday Loans: Fast Cash, Long-Term Trouble

C.U. Smarter: A financial education focus of Veritas Federal Credit Union, located at 276A Nissan Parkway in Canton

When money’s tight and payday feels a million miles away, a quick loan might sound like a lifesaver. But if that loan comes from a payday lender? Think twice—then think again.

Payday loans promise fast cash with no credit checks. But what they don’t tell you is how quickly that “short-term solution” can turn into a long-term financial mess.

What’s the Catch?

Here’s how payday loans typically work:

• You borrow a small amount (usually under $500)
• You write a post-dated check or give access to your bank account
• You agree to pay it back—plus a big fee—on your next payday

The problem? That fee isn’t small. The average annual percentage rate (APR) for a payday loan is nearly 400%. Compare that to the average credit union loan, which can be way under 18%. Yikes.

What Happens If You Can’t Pay It Back?
If you can’t repay the loan on time, the lender may roll it into a new loan—with even more fees. It becomes a cycle that’s hard to break, often leading to:

• Bank account overdrafts
• Repeated borrowing
• Growing debt
• Stress and financial strain

A Better Way Forward
At Veritas FCU, we believe in smarter solutions:
Personal loans with fair interest rates
Financial counseling that’s friendly and free
Emergency savings plans (we’ll help you start one!)

We’re not here to judge—we’re here to help. If you're thinking about a payday loan, let’s talk first. We’ll explore your options and help you avoid a high-cost trap that can put your financial goals on pause.

Because every Veritas member deserves real help, not risky debt.

Learn more or connect with us at veritasfcu.org or 855.663.8328 (yes, you can text us too!).