CFED
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The Inclusive Economy
Payday Plus SF
By Sean Luechtefeld on 08/30/2011 @ 11:15 AM
Our partners at the San Francisco Office of Financial Empowerment sent us an announcement about Payday Plus SF, an alternative, low-interest payday loan. This is just one of many examples of how the San Francisco Office of Financial Empowerment is working to ensure Bay Area residents get to keep the money they work hard to earn.
The Office of Financial Empowerment has partnered with five credit unions to offer an alternative payday loan at interest rates far below what commercial payday lenders charge. Now clients can borrow up to $500 and pay it back over 6-12 months at a maximum APR of 18%.
Our aim is to reduce the practice of payday lending in San Francisco by offering a healthy alternative that will help payday loan customers get out of -or avoid -the debt trap. Payday lending, sometimes known as a cash advance, is a short-term, usually high interest loan that is intended to bridge the borrower's cash flow gap between pay periods. At for-profit payday lenders, interest rates can run as high as 400% APR - usually $15 per $100 borrowed. The majority of borrowers are unable to pay off their loan within the two-week loan term and there is often no option to pay the loan in installments. The typical payday customer will repay $793 on a $325 loan (Center for Responsible Lending). The volume of Payday Lending businesses in the United States is estimated at $28 billion a year, and has grown by over 100% in the past five years.
Payday Plus SF is available at Community Trust - a division of Self-Help Federal Credit Union, Northeast Community Federal Credit Union, Redwood Credit Union, San Francisco Federal Credit Union, Spectrum Federal Credit Union.
Clients can call 2-1-1 for more information.
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