Installment or payday loans can be deceptively expensive. Customers are pushed by predatory lenders to renew their loans over and over again, which causes mountains of interest debt to accrue. According to Pew Research and The Economist, every 90 seconds, $67,000 in new payday loan debt is issued in the U.S. and roughly 2.5 million American households use payday loans each year, making it a $40 billion industry. That’s why Freedom First offers payday loan alternatives and debt consolidation options to our members.
For example, Freedom First’s Payday Relief and Flash Cash loans act as a tool for people who have already fallen into a cycle of mounting high-interest debt to pay off their loans at a more manageable interest rate, which in turn can give them the room they need to break out of the predatory lending cycle.
A Fresh Start Through Debt Relief
Gloria M. describes her financial situation prior to coming to Freedom First as “not a good one.” She was emotionally stressed from judgments, bankruptcy, and dealing with collection agencies. She didn’t even know where to begin to get back to a position of stability.
West End branch staff who got to know Gloria recognized that she needed some guidance, so they referred her to Community Development for a consultation. There, Gloria was able to outline her goals and current situation, which she was then able to transform into an action plan for the next six months.
“Banking with Freedom First has changed my life in so many ways,” she says. “It has really made a difference in everything that I do, how I live now. I was able to get a loan to consolidate my debt and pay off everyone that I owed. I was also able to start re-establishing my credit with small purchases on my Freedom First credit card that I paid off each month to show that I am creditworthy.”
She admits that the process was not easy and took a great deal of patience, diligence, and follow-through to build her credit back up and pay off her outstanding debts. But in committing to her action plan, she was able to demonstrate to her teenage son how to manage his finances.
“I’m showing my son that you can start making smart financial decisions when you’re still young, and that can set you up for a more successful future so you don’t have to go through what I did,” Gloria explains. “But he also sees that if you do end up in a tough spot, it’s not impossible to overcome it and turn things around. If I can do it, so can you.”
Read more in our 2018-2019 Community Impact Report.