SAVANNAH, Ga.–Step Up Savannah Inc. is joining forces with Georgia Heritage FCU and Consumer Credit Counseling Services, along with a number of local employers to begin offering a “small-dollar loan program.”
The plan is employer-based and offers employees between $300 and $1,500 at a reasonable rate, repaid through a paycheck deduction. The lack of a credit score will not automatically bar someone from getting the loan, according to SavannahNow.com.
“It’s open to all employees,” Robyn Wainner, Step Up’s director of Asset Building & Financial Empowerment, told SavannahNow. “We understand that many folks need money if the car breaks down or kids need money for summer camp. We really are trying to provide an alternative to people who don’t have alternatives.”
The program is accessible through the employer’s human resources departments and based on simple criteria — the employee must have worked for the company for at least six months and be in good standing.
The loan is processed through the credit union with the employee getting money same day or within 24-48 hours, Wainner told SavannahNow. Repayment is made via payroll deduction; loans have terms from six to 12 months.
Once the loan is repaid, the deductions that had been coming out of the employee’s paycheck can then go directly into a savings account until the employee opts out, according to SavannahNow.
And the program allows the Consumer Credit Counseling Services to assist the employee with financial education efforts to make improvements down the road.
Georgia Heritage offers loans with an APR of 16.9% for payroll deductions, 18% for cash repayments, versus the 187.5% annual rate for car-title loans, according to the credit union.