Financial Literacy Month: Alternatives to Payday Lending

Senate Bill 613, a bill which would enable lending companies to offer lending products at more than twice Indiana’s current felony loan sharking rate, is no longer at risk of becoming law.
The General Assembly’s third reading deadline has passed, and SB 613 was not brought for a vote. We are grateful that lawmakers made a sound policy decision to reject the expansion of payday and subprime lending. We thank them for listening to Hoosier families and the many faith leaders, veterans organizations, community groups and social service agencies who opposed SB 613.
We opposed this bill for many reasons. Survivors often describe financial insecurity as one of the most significant barriers that they face in their efforts to separate from an abusive relationship and to rebuild safe lives for themselves and their children.  Additionally, financial instability is a significant risk factor for future domestic violence. Payday and predatory lending at exorbitant rates trap individuals in need in a cycle of debt and financial instability. These new products would have made it even more difficult to gain independence, safety and security.
Many of the organizations that opposed this bill (including ICADV) offer alternatives to high-interest loans. If you or someone you know needs assistance, consider the following options:
  • Call 211 for referrals to organizations that may be able to help you with money
    assistance to pay necessary bills, referrals to groups that may help you with food and
    other necessities, and with financial counseling.
  • If you are a survivor of domestic violence, you may be eligible for direct cash assistance
    with necessities, small loans, matched savings and education-specific expenses. Call 1-800-538-3393 for referrals to
    these programs
  • If you are in the military service, a veteran, or a National Guard member, you may be
    eligible for a grant up to $2500 for necessities of daily living. Go to
    https://www.in.gov/dva/2329.htm for the application.
  • If you are a service member, veteran, or eligible dependent, you may be eligible for
    help with payment of necessary expenses from the Veteran of Foreign Wars (VFW)
    Unmet Needs Program. Call 1-866-789-6333, or go to:
    https://www.vfw.org//media/VFWSite/Files/Assistance/UnmetNeedsEligibilityCriteria.pdf
  • Ask your faith group or a local faith group for help. Many have programs to help dig
    people out of small debt and to help with other services, or even to extend small, much
    more affordable loans.
  • If you are employed, find out if your employer has a program to allow you to take an
    advance against your next paycheck.
  • If you are employed, find out if your employer has partnered with a Community Loan
    Center to loan you money at 18% interest, with 3% up front.
  • If you are 60 or over, or disabled, contact your local Area Agency on Aging, which may
    be able to help with health and support programs. To find your local agency, call 1-800-
    986-3505.
  •  If you need help with utility bills, fixing or replacing a furnace, child care, Head Start,
    matched savings accounts, home ownership, or with signing up for affordable health
    insurance, you may be able to get help from your local Community Action Agency.
    Call 1-800-382-9895 to find your local agency.
  •  Contact a local credit union to find out if they have payday alternative loans, running
    around 28% interest.
  • If you haven’t already, find out if your friends or family would loan you a small amount
    temporarily.
  • Use a credit card if you have one – their interest rates are significantly lower
  • Apply to banks for small installment loans at 36%.
  • After you have tried all other options, go to your local Township Trustee for help.

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