NFCU Services To Help Manage A Financial Crisis

Many people are being impacted financially by the precautions set in place to reduce the spread of COVID-19.

This week, we launched a handful of special programs such as the Emergency Loan Payment Relief and Emergency Relief Loan. However, there are many other products and features we’ve always offered that can help navigate some tough times.

We wanted to take a moment to review some of the advantages and disadvantages of these products to help you figure out what works for your specific situation.

Emergency Loan Payment Relief

How this can be helpful: Defers payments on qualified existing loans for 30 days. It can be useful to get through a rough financial patch.

Things to consider: It adds payments to the back end of the loan and accrues interest while it’s deferred. This increases the total amount of interest paid. Not available for every type of loan.

Emergency Relief Loan

Neighbors is currently offering a Relief Assistance Loan up to $3,000 at 5% APR (Annual Percentage Rate). Qualifying members will have no payment for 90 days. Max term of 12 months. Must meet current unsecured guidelines to qualify. All offers subject to credit approval.

How this can be helpful: Can provide cash to help essential needs while trying to recover financially.

Things to consider: While this is a manageable loan at 5% APR (Annual Percentage Rate), it is still a loan that must be repaid. Must meet current unsecured guidelines to qualify.

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Overdraft Protection

Avoid overdraft fees by transferring funds from your savings account or line of credit in order to cover items that would otherwise overdraw your checking account

How this can be helpful: Eliminates costly non-sufficient fund fees.

Things to consider: Excessive use may incur transfer fees. Reduces savings balance.

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Courtesy Pay

An optional account service, which allows for the clearing of checks, electronic items (ACH) and debit card transactions when funds aren’t available in your checking account. $32 fee per item.

How this can be helpful: Eliminates embarrassing declined purchases or payments. Available for emergency expenses. Reduces fees associated with returned check items. Instead of incurring an insufficient funds fee from the financial institution and the vendor, the check is cleared and subject to the one single fee per item.

Things to consider: Encourages overspending. A large fee of $32 per transaction.

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Secured Loans

Loans that are secured by the equity in an asset can come with a much lower interest rate than an unsecured loan. The most common example of this would be a Home Equity Line of Credit (HELOC).

How this can be helpful: Save money with a lower interest rate. Flexible terms and more affordable payments. Easy approval terms. Builds credit.

Things to consider:  Assets are frozen to secure the loan. Must have an income. Failure to repay loans may eventually result in foreclosure of the secured asset.

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Credit Cards

Credit cards are a revolving line of credit that can provide an emergency source of funds. This allows you to make purchases and pay back over time.

How this can be helpful: Can be a resource for emergencies. More secure than cash. Can build credit when used properly. Consumer purchases protected against fraud. Reward points.

Things to consider: Can damage credit if abused. Encourages overspending. Higher interest rate than a secured loan.


GreenPath Free Financial Consultation

If you need a customized solution for your specific situation this may be ideal. GreenPath Financial Wellness is free of charge to all NFCU members. This service provides Budget Review, Debt Management Planning, Housing Counseling Credit Report Review and Student Loan Counseling.

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