Do You Know Someone Caught Up in the Predatory Lending Trap?
The Washington Post reported on this major problem of predatory lending. These are typically small loans aimed at unsophisticated borrowers that include payday loans secured against a borrower’s paycheck, title loans typically secured against a vehicle, or an open-end loan establishing a line of credit.
“Borrowers typically need no more than a checking account and a steady source of income to qualify. This makes the loans particularly attractive for people with poor credit who would not qualify through a bank or credit union.”
Most of these loans carry outrageous interest rates… up to 300% a year.
If someone in your church is caught in this trap, I want to give you an idea of how you can help him or her. Volunteer to make them an interest free loan to pay off their highest interest rate loans to one of these companies that has made a predatory loan to them. Establish a plan to get the person into a Crown class and teach them God’s way of handling money. During that time, encourage them to make regular, interest free payments of the money they have borrowed from you. Let them know that when they pay it back, you will be able to help another family. The goal is to rescue them from the trap and get them trained to avoid the mistake again.
My wife and I have been blessed to make a few of these interest free loans to Christian families we have known who were in great need. We have never failed to be paid back in full.
Originally posted on Crown.