Manchester, NH—April 21, 2008—St. Mary’s Bank today announced it has launched MyPay, a new short-term loan as an alternative to traditional pay day loans. MyPay provides borrowers with immediate access to cash with a reasonable interest rate, significantly lower than the average costs of traditional pay day loans. The not-for-profit, member-owned credit union hopes the lower rates and more flexible terms of MyPay will help reduce reliance on these types of loans.

“A short-term loan can be a life saver,” said Tom Champagne, Director of Community Outreach at St. Mary’s Bank. “By offering MyPay, our goal is to make it easier for members of our community to make ends meet over the long term, without constantly incurring debt to do so. As a credit union, we have a responsibility to provide a more affordable alternative to what is currently available on the market. We’re confident MyPay will help fill that need.”

Whereas costs at typical pay day lenders can equate to over 400 percent interest on an annualized basis, MyPay’s Annual Percentage Rate (APR) is fixed at 18 percent. For example, with SMB MyPay if you borrowed $300 for 30 days you would only pay $4.44 in interest. Borrowers are able to take up to 12 advances per year; however, their monthly balances must be paid in full prior to taking another advance. My Pay is available as a line of credit in two amounts, $250 and $500, with an annual participation fee based on the amount of the line of $15 and $25 respectively. Borrowers only borrow what they need and pay interest only on the amount borrowed. There are no late fees or prepayment penalties.

Thousands of retail locations across the U.S. and New Hampshire offer short-term, “pay day” loans. While the intent of these loans is to help individuals cover expenses until they receive their next pay check, they can sometimes result in mounting debts. Often, borrowers are expected to repay loans within a two-week period at high interest rates. When they cannot repay their loan within that time frame, late fees are applied and the loan repayment period is extended. Interest continues to accrue. As a result, what started as a $250 loan becomes an unmanageable debt for the borrower, who then must take out another loan to repay the first. St. Mary’s Bank’s My Pay gives borrowers the opportunity to break out of this cycle.