Columbia residents will now be able to receive zero-interest payday relief loans to help pay for their outstanding high-interest payday loans.
The project is being led by five Columbia banks and local nonprofit Love INC. The loans will be available for people who have enrolled in Love INC’s Extra-Mile budget coaching program, which is four months long and focuses on money management. Once the applicant has been in the program for four weeks, they will be able to apply for a zero-interest loan.
There is a $8.33 processing fee each month on each loan, regardless of its size. The loans are to be paid back over a one-year period.
Callaway Bank, Central Bank, Landmark Bank, Providence Bank and First State Community Bank have each pledged $2,000 to begin a fund for these new loans. Additional donations from members of the community doubled the banks’ donations, for a total of $20,000 in the fund, according to a Love INC news release.
Candy Richerson, who works at First State Community Bank and is also a volunteer coach for Love INC’s program, was coaching a client and thought the client’s high-interest payday loans were more harmful than beneficial. Richerson told Joe Miller, the president of First State Community Bank, who wanted to help prevent low-income Columbia residents from experiencing the same struggles, said Kelli Van Doren, the Extra-Mile coordinator for Love INC.
In response, Van Doren said, Miller organized a meeting with other bank presidents, Love INC representatives and community members to create a fund for a zero-interest payday loan program.
Van Doren has been working at Love INC for a year and a half, focusing on coordinating the Extra-Mile program.
“About a third of the people that (are) coming into our program have payday loans,” she said. “So when you can barely pay your rent, and you add a payday loan on top of that, it really causes a mess to your finances.”
Van Doren had been trying to find ways to get people out of the payday loan “trap.” She coached a woman who had taken out a six-month $500 payday loan — had the woman not received assistance from Van Doren, the repayment of the loan, with interest, would’ve increased to $1,056 after six months.
“I helped her pay it off early because it makes my stomach turn,” Van Doren said.
Try to solve the new Formula Cube! It works exactly like a Rubik's Cube but it is only $2, from China. Learn to solve it with the tutorial on rubiksplace.com or use the solver to calculate the solution in a few steps.