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New loan program offers free financial education for borrowers with car title loans

Download the brochure about Lend a Hand, which includes the application for the loan program.

The Arizona Community Foundation is among four community-focused organizations that have partnered to launch a program to rescue Maricopa County residents struggling to pay off high cost title loans and help put them on a path to healthy credit and financial success. The program, called Lend a Hand, is offered through ACF, MariSol Federal Credit Union, the Phoenix IDA, and Take Charge America.

According to the Consumer Federation of America, Arizona is the seventh most concentrated title loan market in the country. In its report, “Wrong Way: Wrecked by Debt,” the Federation states that one in six title loan borrowers in Arizona faced repossession of their car and associated fees averaging half of the borrower’s outstanding loan debt.

“Individuals across our community are facing what is called a debt trap. They get caught in a vicious borrowing cycle of exorbitant interest rates, excessive fees, and unrealistic loan terms,” said Juan Salgado, Phoenix IDA executive director. “Lend a Hand loan program is an alternative for those who need help paying off their loan to avoid losing their car, ruining their credit, or worse,” Salgado continued.

Here’s how the Lend a Hand program works:

  • Interested title loan borrowers can visit www.takechargeamerica.org/lendahand to download an application and review eligibility requirements.
  • Once the application has been submitted, the borrower can schedule a free, confidential credit counseling session with Take Charge America to develop a budget and create an action plan to eliminate debt and save for the future.
  • MariSol Credit Union will review the application for eligibility, and pay off the outstanding title loan for qualified applicants, up to $2,000. MariSol will then offer approved applicants a new low-interest loan with better repayment terms. MariSol will help borrowers establish a savings account to fund future emergencies, to include an initial savings deposit of $25 plus $10 for every month of the loan.

“The Lend a Hand loan program offers applicants favorable loan terms with zero fees that will make sense for their budgets,” explained Robin Romano, chief executive officer of MariSol Federal Credit Union. “Approved borrowers will also gain membership to our credit union and enjoy the benefits and stability that offers,” stated Romano.

According to a study by the Pew Charitable Trusts in 2015, more than 2 million people, or approximately 1 percent of American adults annually, use high-interest automobile title loans and borrow against their cars.

“Studies prove what we already observe as we drive down some Phoenix streets. Car title loan companies are concentrated in financially vulnerable communities,” said Elisa de la Vara, Chief Community Officer at the Arizona Community Foundation. “Until Arizona’s policy makers act to further limit this industry, as they did with payday lenders, this program offers a better option for residents who are struggling to pay their car title loans,” explained de la Vara.

Take Charge America, a national nonprofit credit counseling agency headquartered in Phoenix, is assisting with the financial education component.

“Our role is to focus on each applicant’s long-term financial health. As soon as you contact us, we will provide a free credit counseling session, a thorough review of your credit report, and help you build a budget,” said David Richardson, chief executive officer of Take Charge America. “We aim to provide the financial knowledge and resources to help borrowers avoid any costly lending traps in the future,” added Richardson.

Want to know more?

We encourage you to share this information with organizations and programs that serve individuals who could benefit from the Lend a Hand loan program and live in Maricopa County. To find more information:

  • Download the brochure [PDF, 402 KB]
  • Visit the website at takechargeamerica.com/lendahand.
  • Call 877.822.2410

About Arizona Community Foundation

The Arizona Community Foundation is a statewide nonprofit organization headquartered in Phoenix with five regional offices located outside of the metro area. Established in 1978 and certified under the National Standards for U.S. Community Foundations, ACF is among the top 25 community foundations in the nation with trust and endowment assets exceeding $843 million. www.azfoundation.org

About MariSol Federal Credit Union

MariSol Federal Credit Union’s empowers our members through financial inclusion by access to affordable and equitable financial solutions. www.marisolcu.org

About the Phoenix IDA

The Phoenix IDA is an entrepreneurial nonprofit that draws upon its decades of experience and proven record of accomplishments to support community and economic development through access to capital. The Phoenix IDA improves the community through multiple strategies such as bond financing, investments, and down payment assistance to advance homeownership. The organization’s primary goal is to positively impact vulnerable populations and underserved communities. Established in 1981, the Phoenix IDA is a self-sustaining organization governed by a nine-member Board of Directors. www.phoenixida.com

About Take Charge America

Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, student loan counseling, housing counseling and bankruptcy counseling. It has helped more than 1.6 million consumers nationwide manage their personal finances and debts. www.takechargeamerica.com

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