Emergency Loans that Foster Savings during COVID-19
In this most difficult of health and economic times, people, especially those of modest means, are having a more difficult time than most. With the pandemic effecting the lower income portions of our society the way it has, having the ability to meet basic living expenses is a significant challenge.
The Hill District Federal Credit Union, a 50-year-old community financial institution, in partnership with the Benter Foundation, have come together to try, in a small way, address the economic impact of the pandemic. We have developed an interest free loan product that not only will help them with their immediate living expenses but it will have an emergency savings component that will give them a bit of security and will also demonstrate the importance of savings. The loan will be given at 0% interest and the first payment will not be due for 90 days. The borrower will have up to 18 months to repay the loan which should make the monthly obligation manageable. Since one’s credit score is an important aspect of their lives; we will report their positive repayment history to the credit bureaus to help boost their score. Families of modest means have a difficult time saving for life’s financial setbacks. This program has a $500.00 savings component that we hope will encourage and incentivize those that use the service to continue adding to their savings even after the loan is repaid. The service is called the Family Protection Program.
Richard Witherspoon, CEO