LANSING, Mich. — Everyone knows the holidays can be a difficult time to get through, financially. Between the anticipated costs, like heating bills, gifts and parties, travel fees, new clothes, and the unforeseeable ones like a sudden car or furnace repair, many people find themselves in need of assistance during the winter.
Michigan credit unions understand this and have made it common practice to offer relief during the season. Among the most common products and services are the pre-approved, low APR loans ranging from $1,000-$3,000, with 6-24-month payback plans.
“Our team knows that hardships happen in life — often beyond our control. CP Federal employees pride themselves in serving as our members’ trusted advisors and providing solutions to getting life back on track,” said CP Federal Credit Union COO Valerie Schuette. The Jackson-based credit union is offering two seasonal loan products through December — the Christmas Gift Giver and the Black Friday Fanatic loans.
FreeStar Financial Credit Union told MCUL their holiday loan, which rewards members with good repay history, is a popular product.
Northland Area Federal Credit Union said its holiday loan product, MyLoans, is their low-cost alternative to predatory lending. Since this time of year can make consumers increasingly vulnerable financially, they’re more likely to turn to quick solutions from payday lenders and others that have unfair credit practices built to put borrowers in a cycle of debt.
Alisha Jones, marketing assistant for Ada-based River Valley Credit Union, echoed these sentiments, “Over 10 years ago, we saw a need to help our members have extra money during the holiday season. The intent of our holiday loan is not to make money for the credit union, but to help our members. We offer it at a discounted rate to ensure we help them during the most expensive time of year so they don’t pay a higher rate using a credit card or payday lender.”
And, as with FreeStar Financial, Jones said many of their members count on this loan every year, “They start asking about it in September as they look forward to utilizing it.”
Alongside a small loan product, Astera Credit Union has come up with a program to keep members from using all of their hard-earned savings. For those who have saved some money over the year in their Astera Christmas Club account, the credit union is offering the Double Your Club Loan. With this option, members qualify to double the amount of money saved up to $3,000. Like the holiday loan, members can pay the loan back with terms ranging from 6-24 months. Astera lives a mission of providing innovative financial solutions to their members year-round, and these holiday loan options are an extension of that mission.
Many other credit unions offer holiday loan options, such as TBA, Wayne Westland, Wildfire, Christian Financial, ELGA, Public Service, COPOCO Community, Kellogg Community, Extra, Genisys and Wanigas Credit Unions.
When asked how members commonly use this product, Genisys VP of Lending Jessica Buck said many use it for travel in order to spend time with friends and family.
“We have also seen a lot of financially savvy members take advantage of discounts by using store credit cards and consolidating the balances right away with our low rate Holiday Loan,” continued Buck.
Alongside an alternative to predatory lending, Genisys sees their holiday loan as an educational opportunity for members, “By encouraging them to talk with us first before making a financial decision, we can often save them quite a bit of money in the long run … Overall, it is our goal to strive to be a resource for our members to turn to during any time of the year, and having products that make sense to them financially is something we consistently offer.”
Tammy O’Leary, director of lending for Wanigas, said members use their holiday loan for a variety of reasons, including a “big ticket home item for themselves” and debt consolidation, as well as general seasonal expenses.
O’Leary stressed the importance of the loan’s short term (Wanigas’s loan runs 12 months), which gives members a peace of mind “that this is not a forever loan.”
During the 2018 holiday season, Wanigas closed more than $4.3 million in these loans.
“The loan provides the Wanigas staff an opportunity to help members improve their credit in the future by working with the members on improving their credit score,” continued O’Leary.
The other most popular holiday credit union relief option is the skip-a-payment choice, which allows members to choose a month, typically between November and February, to skip a loan payment with no penalty. Wayne Westland, FreeStar Financial, ELGA, Michigan First, Kellogg Community, Honor, Extra, Genisys and Wanigas Credit Unions all told MCUL this is open to members during the 2019 season.
“While we actually offer this member perk all year long, we promote it around the holidays when household funds can get a little tight,” said Honor VP of Lending Dustin Nehls, regarding their skip-a-pay program. “We want to give our members the grace and flexibility to have a tight month due to whatever circumstance they have going on without the added mental stress of a late loan payment. The skip-a-pay program gives members a solution with no questions asked to skip a loan payment and use their money where they feel it’s best needed at that point in time. We understand that life happens, even around the holidays.”
Honor sees nearly 4,000 payments skipped per year using the program, most of which are done through an online self-processing service.
Allowing members to skip an auto payment allows them to free up hundreds of dollars to use on seasonal necessities without promoting the debt of a credit card purchase or high APR loan.
Some, like Genisys, offer members to skip a payment twice in each calendar year, and some leave both months for the end of the year.
A Savings Club & Other Solutions
Besides their other holiday offers, Burton-based ELGA has created the ELGA Christmas Club account, which allows members the opportunity to save for holiday shopping throughout the year. Then, on Oct. 1, all of their saved funds are transferred to a designated account for holiday spending.
From October 2018–September 2019, ELGA members saved $666,650 in their Christmas Club accounts.
“Nearly 1,100 ELGA members have made the decision to save specifically for the holidays using our Christmas Club savings account,” said CEO Karen Church. “We know that small steps throughout the year sets members up to stay within their budget, and ELGA associates have conversations with our members about these steps to ensure they’re successful in their short- and long-term savings goals.”
Michigan First is similarly helping people learn better savings habits, using their Money Mentor program, which gives free group presentations at schools and other events.
“In November and December, we develop financial content focused on how to save money and spend wisely to help our members survive the holiday season,” said President/CEO Michael Poulos.
There are other creative ways credit unions are saving members money, such as Christian Financial’s Community CA$H App, which is a member rewards program that offers members discounts with local merchants in the metro Detroit area. The app is free to members and is a helpful tool to save at local shops, salons, restaurants and more this holiday season. MSU Federal Credit Union members are automatically entered to win money when they use their Visa card to make 5 or more purchases on Black Friday, Small Business Saturday or Cyber Monday.
These financial relief options are compounded by all the donations of goods and services that Michigan credit unions do during the holidays, such as Consumers Credit Union’s complimentary gift wrapping stations to help last-minute shoppers, or FreeStar Financial’s Giving Tree, placed in each branch lobby allowing members to give or take hats, mittens and scarves.
MSU Federal, Michigan First and Kellogg Community Credit Unions, to name a few, have similar programs focused on donations aimed at helping specific families in the community who may or may not have holiday gifts otherwise.
Advia Credit Union, which also participates in a community gift collection, gives employees paid time off to volunteer at a toy shop where the collected toys are donated. Approximately 100 employees volunteer to stock toys, help parents choose toys for their children and help carry them to their new owners’ vehicles.
“Our employees look forward to volunteering at the [toy shop] each year,” said Advia VP of Marketing and PR Nancy Loftis. “Not only do employees get to help collect the toys at the branch, they get to see firsthand the joy families feel as they pick out gifts for their children.”
Whether it’s through small, affordable loans, skip-a-payment options, the coordination of community donations or other assistance efforts, Michigan credit unions are working to make the holidays a better, less stressful time for their community.
For more information, contact your local credit union to see what holiday relief options are available.
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