With the drying up of payday and online loans for Evanston and other Illinois residents, some people are faced with a dilemma.
That is, what do you do when you need money, but the lenders you were counting on no longer provide the money?
This is one effect of the State Predatory Loan Prevention Act, which limits interest on small loans to 36% APR (Annual Percentage Rate).
Many of the state’s payday and online lenders, which often charge 200-400% APR, have chosen to close, or at least not offer loans in Illinois.
But help is available for residents of Evanston who might have used these institutions before. Not necessarily a loan… but rather an education in financial literacy and well-being; training on how to better manage your money and not get stuck in the trap of endless debt.
Sarah Gordon, an Evanston resident, is responsible for market and business development within the Financial health network, a non-profit consultancy firm that helped the city develop the education program and select a partner, First Northern Credit Union.
“A lot of it,” says Gordon, “about how you change financial behavior. ”
Even though Evanston is a generally affluent community, Gordon says, “There are quite a number of people here who are financially vulnerable.
“There are pockets of real needs” in the community, she says, especially because housing is so expensive.
Nationally, the network says 14% of people are “financially vulnerable”, 52% “adapt financially” and 34% are “financially healthy”.
“Adjusting financially” means getting by and paying the bills, but these people, Gordon says, “are just a few financial emergencies away” from serious problems.
The City’s partnership with First Northern offers a series of free webinars on a variety of financial health issues, from managing a crisis to financing retirement and rebuilding credit.
The First Northern website says Evanston residents who complete a series of courses may be eligible for a certificate of completion, which could make them eligible for a Credit Sense loan.
This is basically a credit loan for people who may have had to resort to short term payday loans due to bad credit rating.
For more information on the City-First Northern Partnership for Evanston Residents, visit fncu / org.Our-Valued-Partners / Evanston.
There are also other financial literacy and coaching programs in town, such as the one offered by the YWCA.
Gordon says Evanston is doing the right thing by setting up a Resident Financial Wellness Partnership program.
But she would also like the city to join a national group of communities called Cities for Financial Empowerment.
Thirty-one cities, including Chicago, are part of the group, whose website says an initiative, called Financial Navigators, is helping residents cope with the financial impact of the COVID-19 pandemic, “providing assistance remotely to manage critical financial issues and make referrals to other social service agencies and resources.
Gordon says those who are financially comfortable should know that not everyone is so fortunate.
“We’re never going to get people to afford homes in Evanston,” she said, “if we don’t start working on financial health from day one. ”