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Churches issue low cost loans and assist with predatory lenders.

In an effort to help families living in poverty that are turning to payday loans, the charity organization known as Faith for Just Lending was created to provide solutions to borrowers. A number of churches, community organizations, and faith based groups make up this network. They advocate for people that are being abused by predatory lenders and assist the less fortunate, including immigrants, non-English speakers, and the vulnerable. Not only may low cost loans be provided by a local church, but free counseling and support is also arranged.

While these various organizations that are offering help for payday loans are faith based, people from all religions can turn to them for support. The groups that make up for Faith for Just Lending organization include, but are not limited too, The Center for Public Justice, US Conference of Catholic Bishops, Salvation Army, National Baptist Convention, Catholic Charities, and many others listed below.

The goal is to not only ensure borrowers are treated fairly, but to also offer lower cost alternatives to these struggling families. There are several ways these churches offer assistance, including the following:.

  • The Faith for Just Lending organization works with state agencies to lower the maximum interest rates being charged by national as well as regional payday lenders.
  • Some churches are offering their own forms of low interest rate loans to use for paying bills, rental costs or housing. When they are provided, the dollar amount issued will be very small.
  • Partnerships have been formed with credit unions, counseling agencies, and other organizations.
  • Churches try to get the working poor and indigent into the main stream financial world by helping them opening bank accounts, build credit, and complete other tasks.
  • Many other options are offered too, and find alternatives to payday lenders.

Faith for Just Lending has also created partnerships with non-profit credit counseling agencies in an effort to help vulnerable families break the cycle of debt. What often happens is when an individual is desperate for cash to pay their bills, rent, or maybe to keep food on the table, they turn to a predatory lender. Many they take out a car title loan, or they turn to one of their local payday loan shops. Or they take other drastic steps to get the help they need.

Oftentimes they turn to one of these payday loan companies to borrow money, sometimes at interest rates as high as 300% APR. Many families are now even pawning their possessions to raise the cash they need. No matter which form of borrowing is used, when the loan is due, the customer learns they do not have the money to pay it off. So they borrow again. This pattern often repeats itself month in and out. This is how that cycle of debt starts.




This is when credit counseling can be invaluable. Ideally the non-profits should be turned to way before a family even faces a hardship, so before they even take out a loan. But when it not possible the agencies can still help. The groups that make up the Faith for Just Lending, including Ecumenical Poverty Initiative, NaLEC (National Evangelical Coalition), and Catholic Charities among others will always encourage a borrower to talk to one of these specialists. They have lists free credit counseling agencies.

Not only can counseling help find alternatives, or assist a borrower with finding alternate sources of low cost loans, but Faith for Just Lending also wants local churches to stress saving money for emergencies and budget responsibility. As part of this counseling, they review with working poor families how to find the best deals on buying food, review utility bill payment plans, and other forms of non-monetary support. Oftentimes a church is what people turn to in a time of crisis, and they can do their part to end poverty. The guidance they can provide is often critical to a struggling family.

Churches also partner with Faith for Just Lending as well as local lenders to provide low cost loans to families. Even if the potential borrower has either poor credit scores or not even a savings account to their name, the goal is still to provide them some form of affordable loan that has terms in place that is based on their ability to repay it. If a lender knows that the person will never repay the funds based on their current household income and expenses, then they just should not provide them the money they are requesting.

There are different organizations to apply at. The lower interest rate loans issued by churches can come from many sources. The national faith based groups that take part are National Baptist Convention, Black Baptists, Salvation Army social services, National Association as well as Latino evangelicals, which operate in all states. Or a potential borrower can always contact their local Catholic Charities center for information.





Other sources of funding may be available as well from hundreds of local faith based groups. Some examples of these may be regional churches including Alabama Baptist State Convention, Kentucky Baptist Convention, Southern Baptist Convention, Virginia or Alabama-West Florida United Methodists, South Carolina as well as Kentucky United Methodists. They not only help the vulnerable get the money they need, but the groups also work with Faith for Just Lending on issuing loans for people with poor credit.

Faith for Just Lending will also often work with credit unions to offer these low cost loans. Or when that is not possible, they may start their own, small dollar emergency fund. This is what Catholic Charities will often due. They will provide the applicant a few dollars for paying critical expenses, and the interest rate will be affordable.

Anytime a family is struggling, using a car title or payday loan should be their last option. With more faith based churches now offering options, as well as national organizations such as Faith for Just Lending, potential borrowers have even more options available to them.

By Jon McNamara

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