Payday Loan Alternatives In Lincoln NebraskaLincoln, Nebraska – Currently there are six credit unions that have joined together to offer an alternative to payday loans in Lincoln Nebraska. The group of six is currently comprised of Liberty First, LincOne Federal, MembersOwn, Nebraska State Employees, Peoples Choice Federal and University of Nebraska Federal Credit Unions. The city of Lincoln currently has twenty seven registered payday lenders which shows there is a market for short term loans

Brandon Luetkenhaus, a spokesperson for the credit unions, said these loans will be called Quick Cash loans and will be offered for similiar ammounts to payday loans. There will be a $20 processing fee and an annual interest rate of 18 percent. As opposed to payday loans, these Quick Cash loans will be offered for a 60-day term with no penality for paying it off early.Cash advance lenders, also known as delayed deposit services, are limited to a 34-day term due to their high interest rates.

There will also not be any credit checks performed for these loans The only requirements are proof of income and to have been a member of the credit union for at least 30 days prior to applying for the loan.

State Sen. Amanda McGill of Lincoln, a supporter of the new program said, “payday loans can lead to a cycle of debt because it is easy for a borrower to take out loan after loan, often to pay off a previous payday loan. This is a great way to keep that from happening,” said Senator McGill.

There was a similiar program implemented three years ago in Columbus, Nebraska - a smaller town of approximately 20,000. The Columbus United Federal Credit Union started its program three years ago after noticing it had seven payday lenders in the small town.

With credit unions taking the innitiative to offer alternatives to payday loans in Nebraska it would seem that regulations for payday lending may no longer be necessary. Competition will simply drive them out of business unless they want to start charging more reasonable rates.