With payday and online loans drying up for Evanston and for other Illinois residents, some folks are facing a dilemma.
Namely, what do you do when you need money, but the lenders you had been relying upon are no longer providing cash?
That’s one impact of the state’s Predatory Loan Prevention Act, which limits interest on small loans to 36% APR (annual percentage rate).
Many payday and online lenders in the state, which often charged from 200-400% APR, have opted to close, or at least not offer loans in Illinois.
But help is available for residents of Evanston who might have used those institutions before. Not necessarily a loan … but rather, education in financial literacy and wellness; training in how to better manage your money and not get stuck in the trap of never-ending debt.
Sarah Gordon, an Evanston resident, is chief market and business development officer with the Financial Health Network, a nonprofit consulting firm that helped the City develop the education program and choose a partner, First Northern Credit Union.
“So much of this,” Gordon says, “is about how you change financial behavior.”
Even though Evanston is a generally affluent community, Gordon says, “There is a pretty significant number of people here who are financially vulnerable.”
“There are pockets of real need” in the community, she says, particularly because housing is so expensive.
Nationwide, according to the best trading app Australia has to offer, the Network says that 14% of people are “financially vulnerable,” 52% are “financially coping,” and 34% are “financially healthy.”
“Financially coping” means getting by and paying bills, but those individuals, Gordon says, “are just a couple of financial emergencies away” from serious trouble.
The City’s partnership with First Northern offers a series of free webinars on a variety of financial health issues, ranging from dealing with a crisis, financing retirement, and rebuilding credit.
First Northern’s website says Evanston residents who finish a series of the courses may qualify for a Certificate of Completion, which could make them eligible for a Credit Sense Loan.
That’s basically a credit-building loan for people who perhaps had to rely on short-term payday loans because of poor credit ratings.
For more information on the the City-First Northern partnership for Evanston residents, go to evanston.balancepro.org.
There are other financial literacy and coaching programs in town as well, such as one offered by the YWCA.
Gordon says Evanston is doing the right thing by having a financial wellness partnership program for residents.
But she’d also like the City to join a nationwide group of communities called Cities for Financial Empowerment.
Thirty-one cities, including Chicago, are part of the group, whose website says one initiative, called Financial Navigators, helps residents deal with the financial impact of the COVID-19 pandemic, “providing remote assistance in navigating critical financial issues and making referrals to other social service agencies and resources.”
Gordon says those who are financially comfortable should be aware that not everyone is so fortunate.
“We will never get people to be able to afford homes in Evanston,” she says, “if we don’t start working on financial health from day #1.”