Lower Cost Loans
If you have tried all non-credit options and still need financial help, you could consider a low-cost, short-term loan. A low-cost, short-term loan may be obtained in addition to a non-credit alternative or may be a stand-alone alternative. Often, a new small-dollar loan is obtained to consolidate several loans that you already have outstanding. Whatever approach you choose, the key to obtaining credit is to ensure you understand your rights and options, and are obtaining a fair credit product.
As of January 1, 2023, in New Mexico, the cost of a small dollar loan will be capped at 36% annual percentage rate (APR) for loans above $500. For loans below $500, the lender can charge 36% plus an additional fee equal to no more than 5% of the loan amount.
Before you take out a loan from any type of lender, think about the total costs you will pay over time – not just the periodic payment, but whether you want to borrow, what other monthly expenses you have and how you will pay back the loan.
Where can I get a loan?
Many banks and credit unions will offer personal small dollar loans to their customers and members.
What if I don’t have a bank or credit union account?
If you do not currently have a bank or credit union account, consider opening an account – it may give you more financial flexibility in the long-run and may have programs that help you manage your finances. Some people have had bad experiences with banks or credit unions. If that has happened to you, look at other credit unions or banks – they may have bank accounts products that are more affordable and safer to use.
There is a national Bank On Coalition that works with banks and credit unions to develop and offer safe and affordable accounts. For information about safe and affordable accounts – either at a credit union or bank – click the link: link to safe and affordable accounts. While this link is to an Albuquerque program, many of the credit unions and banks that participate in Albuquerque also have branches in other areas of New Mexico and offer the same safe and affordable banking products throughout the state.
As of January 1, 2023, in New Mexico, the cost of a small dollar loan will be capped at 36% annual percentage rate (APR) for loans above $500. For loans below $500, the lender can charge 36% plus an additional fee equal to no more than 5% of the loan amount.
Before you take out a loan from any type of lender, think about the total costs you will pay over time – not just the periodic payment, but whether you want to borrow, what other monthly expenses you have and how you will pay back the loan.
Where can I get a loan?
Many banks and credit unions will offer personal small dollar loans to their customers and members.
What if I don’t have a bank or credit union account?
If you do not currently have a bank or credit union account, consider opening an account – it may give you more financial flexibility in the long-run and may have programs that help you manage your finances. Some people have had bad experiences with banks or credit unions. If that has happened to you, look at other credit unions or banks – they may have bank accounts products that are more affordable and safer to use.
There is a national Bank On Coalition that works with banks and credit unions to develop and offer safe and affordable accounts. For information about safe and affordable accounts – either at a credit union or bank – click the link: link to safe and affordable accounts. While this link is to an Albuquerque program, many of the credit unions and banks that participate in Albuquerque also have branches in other areas of New Mexico and offer the same safe and affordable banking products throughout the state.
Credit Unions
Credit unions are not-for-profit financial cooperatives, owned by account holders called “members.” Credit unions serve one-million New Mexicans throughout the state. A credit union holds your money in an account and offer loans to businesses and individuals.
All credit unions offer many types of financial services, including savings accounts, checking accounts, debit cards, ATM cards, credit cards, financial counseling and many different types of loans.
Credit unions are typically involved in their community and often offer lower fees for their accounts or loans. Credit unions are open to people living, working or worshiping within a geographic region or serve employees of specific employers or members of associations.
Small dollar loans at credit unions have different names. Go to “borrow “ or “loans” on the website page. Some credit unions refer to these types of loans as “signature loans”, “personal loans”, “payday alternative loans” or other names. You may call the credit union and speak to someone to learn more or click through each loan listed to find out how to qualify. Many of these loans do not require a credit check, but will require you to have an account at the credit union and proof of a source of income.
To find out which credit unions offer services in your area, use the map below:
All credit unions offer many types of financial services, including savings accounts, checking accounts, debit cards, ATM cards, credit cards, financial counseling and many different types of loans.
Credit unions are typically involved in their community and often offer lower fees for their accounts or loans. Credit unions are open to people living, working or worshiping within a geographic region or serve employees of specific employers or members of associations.
Small dollar loans at credit unions have different names. Go to “borrow “ or “loans” on the website page. Some credit unions refer to these types of loans as “signature loans”, “personal loans”, “payday alternative loans” or other names. You may call the credit union and speak to someone to learn more or click through each loan listed to find out how to qualify. Many of these loans do not require a credit check, but will require you to have an account at the credit union and proof of a source of income.
To find out which credit unions offer services in your area, use the map below:
Banks
Banks are financial institutions owned by stockholders. A bank holds your money in an account and offer loans to businesses and individuals. Banks offer many types of financial services, including savings accounts, checking accounts, debit cards, ATM cards, credit cards, financial counseling and many different types of loans.
Currently, the following banks participate in the Bank On Coalition and offer certified safe and affordable accounts: Bank of America, Chase, First Convenience Bank, US Bank, and Wells Fargo. If you open an account in one of these banks, make sure to ask for the “Bank On” account product – it may have a different name, but should have these protections.
You may also do an online search to see which banks serve your area through the City of Albuquerque's Bank on Burque program. Find out which banks offer services in your area using the button below:
Currently, the following banks participate in the Bank On Coalition and offer certified safe and affordable accounts: Bank of America, Chase, First Convenience Bank, US Bank, and Wells Fargo. If you open an account in one of these banks, make sure to ask for the “Bank On” account product – it may have a different name, but should have these protections.
You may also do an online search to see which banks serve your area through the City of Albuquerque's Bank on Burque program. Find out which banks offer services in your area using the button below:
Frequently Asked Questions
What is a safe and affordable account?
While other items may also be important to you, you should typically consider credit union or bank accounts that have low minimum balance requirements, no or low overdraft costs, limits on other fees, a free debit card, free on-line banking and a willingness to work with people who may have had a prior bad experience through financial counseling/coaching.
If you open an account in one of these banks or credit unions, make sure to ask for the “Bank On” account product – it may have a different name, but should have these protections.
Once you have a bank or credit union account, you may become eligible for less costly alternative loans or credit.
What is the best way to get information about a small dollar loan?
Each bank and credit union offers their own type of small dollar loan and has differing requirements for obtaining one. The best way to find out more is to call them and ask to speak with someone that can help you determine what loan product will best fit your needs.
Is it easy to qualify for a small dollar loan?
Each bank and credit union will have differing requirements for obtaining a small dollar loan. At a minimum, you will need to show your ability to repay the loan, typically by providing recent paystubs from your employer. Other qualifications may apply and you should contact the specific lender for details.
Can I open my account and get a small dollar loan using my computer or phone?
Most banks and credit unions offer online account services and mobile banking. Online services may allow you to open an account, apply for small dollar loans, transfer money between accounts, make loan payments and check balances from your computer or phone. To find out more or get assistance with online services or mobile banking, it is best to contact the financial institution.
While other items may also be important to you, you should typically consider credit union or bank accounts that have low minimum balance requirements, no or low overdraft costs, limits on other fees, a free debit card, free on-line banking and a willingness to work with people who may have had a prior bad experience through financial counseling/coaching.
If you open an account in one of these banks or credit unions, make sure to ask for the “Bank On” account product – it may have a different name, but should have these protections.
Once you have a bank or credit union account, you may become eligible for less costly alternative loans or credit.
What is the best way to get information about a small dollar loan?
Each bank and credit union offers their own type of small dollar loan and has differing requirements for obtaining one. The best way to find out more is to call them and ask to speak with someone that can help you determine what loan product will best fit your needs.
Is it easy to qualify for a small dollar loan?
Each bank and credit union will have differing requirements for obtaining a small dollar loan. At a minimum, you will need to show your ability to repay the loan, typically by providing recent paystubs from your employer. Other qualifications may apply and you should contact the specific lender for details.
Can I open my account and get a small dollar loan using my computer or phone?
Most banks and credit unions offer online account services and mobile banking. Online services may allow you to open an account, apply for small dollar loans, transfer money between accounts, make loan payments and check balances from your computer or phone. To find out more or get assistance with online services or mobile banking, it is best to contact the financial institution.
Other Loan Options
Employer-based loans:
In New Mexico, many employers offer employees access to low-cost loans as part of their benefit package. Ask your employer if they participate in TrueConnect. TrueConnect makes loans at 19.99% for up to $5,000 with no credit check. Other rates and loan amounts are available for employees with good credit.
Online only lenders:
Not all online lenders are affordable or offer safe loans. However, members of the American Fintech Council (AFC) adhere to responsible lending standards that include charging at or below 36 percent APR. Go to the American Fintech Council website for more information.
Beware of online lenders who offer loans for more than 36% APR – claiming that they are not subject to New Mexico rate caps. These lenders most likely are trying to evade New Mexico’s consumer protection laws. While the loan process may be simple, the financial risks and costs are high.
For Purchases:
“Buy Now, Pay Later” can be an affordable option if you are able to manage the monthly or biweekly payments. If you don’t stay on top of the payments and miss a payment or pay late, you could end up in a cycle of unaffordable debt and have to pay expensive and unexpected late fees, which could wreak havoc on your overall finances. These services also do not have the same consumer protections provided by other forms of credit loans.
In New Mexico, many employers offer employees access to low-cost loans as part of their benefit package. Ask your employer if they participate in TrueConnect. TrueConnect makes loans at 19.99% for up to $5,000 with no credit check. Other rates and loan amounts are available for employees with good credit.
Online only lenders:
Not all online lenders are affordable or offer safe loans. However, members of the American Fintech Council (AFC) adhere to responsible lending standards that include charging at or below 36 percent APR. Go to the American Fintech Council website for more information.
Beware of online lenders who offer loans for more than 36% APR – claiming that they are not subject to New Mexico rate caps. These lenders most likely are trying to evade New Mexico’s consumer protection laws. While the loan process may be simple, the financial risks and costs are high.
For Purchases:
“Buy Now, Pay Later” can be an affordable option if you are able to manage the monthly or biweekly payments. If you don’t stay on top of the payments and miss a payment or pay late, you could end up in a cycle of unaffordable debt and have to pay expensive and unexpected late fees, which could wreak havoc on your overall finances. These services also do not have the same consumer protections provided by other forms of credit loans.
