A local credit union offers an alternative for people who borrow high interest payday loans.

The Windsor Family Credit Union has launched “SmarterCash: An Alternative to Payday Loan”. It offers loans ranging from $ 500 to $ 2,000, with fees of $ 1.42 for every $ 100 borrowed.

Payday loan companies in Ontario can charge up to $ 21 for every $ 100 borrowed.

To access the payday loan, clients must have an account with WFCU, which will cost you $ 5.

“We need to inform users of payday lending entities that they are overpaying for short-term funding when there is an alternative,” Eddie Francis, president of the WFCU Credit Union said in a statement.

He thinks it’s a smarter, more responsible solution to high interest payday loans. A local financial advisor said his industry calls payday loans a necessary evil because it is the only way for some to access credit.

“We’re not happy that they exist,” said Wendy Dupuis, Managing Director of Financial Fitness.

She wants to remind people that payday loans should be for emergencies. But they’re often used by low-income people to get by.

“Debt is skyrocketing and getting out of hand and people are in trouble very quickly,” Dupuis said.

She thinks the WFCU loan might be a better alternative.

“It’s not going to serve everyone, just because the interest rate is still there,” said Dupuis, “it is still high. Remember, these are the people who can least afford to borrow money. I know they are in a high risk category, but these are the people who generally cannot access any other form of credit. And that credit is so expensive for them, especially for small amounts, it is really damaging.

This is something Elijah Cadarette knows well. He has borrowed from payday loan companies in the past. Cadarette said a lender charged him 49 percent interest. It has tips for anyone considering using them.

“I would say you have to take the scoring into account,” Cadarette said, “What you have in terms of income. I think payday loans are bad news anyway.”

WFCU also offers a “Step Up” loan program for those using “SmarterCash” loans. It will offer members who have a successful credit history lower interest rates, higher limits, one-year terms and cash advances.

Dupuis offers another solution. She recommends that those stuck in the payday loan utilization cycle go back to a reputable nonprofit credit counseling agency.

“There is help available in the community,” she said.