Exploration of Payday Loan Alternatives – July, 2021
As part of our parish exploration of meaningful outreach initiatives in our local community, we are following up on a requested focus on possible alternatives to payday lending services that offer short-term loans with high interest rates and expensive fees. This is a major issue for lower-income families in our area who likely find themselves in a vicious cycle of ever-increasing debt, contributing to significant negative impacts on mental and physical health.
We have been exploring ways that Grace might be part of strategies to mitigate dependence on high - interest loans and assist families in gaining financial stability. Interestingly, this is a focus of the Archbishop of Canterbury. Our research includes strategies used by other Christian groups in the U.S and discussions with potential local partner agencies (e.g., 50Ways Rockbridge, ESOL, RARA, Project Horizon) to determine what might be feasible here.
At this point, we are considering piloting on a small scale an interest-free emergency loan program to include a maximum loan amount, application, and appropriate repayment terms. A key component of the program would be applicant meetings with a financial advisor to review income, living expenses and debts to identify potential savings. Such a personalized financial management approach addresses the root issues of financial struggles rather than providing merely a short-term band aid approach. Research and discussions with our partner agencies continue.
If Christian action in this area interests you or you know people who might have interest or expertise, please contact Anna Crockett at firstname.lastname@example.org or 460-3254 so we can include you. Do come join us.