Michelle and her husband, Tim, had taken out a loan with an interest rate of 1325%. They had been struggling on getting out of the predatory lending cycle. Recognizing that predatory lending such as payday and title loans contributes to hardships, Catholic Charities of Northeast Kansas offers a loan refinance program in partnership with Country Club Bank and other banking institutions. Michelle and Tim were approved for our Kansas Loan Pool Project (KLPP) and established a banking relationship with County Club Bank.
Our KLPP Supervisor assisted Michelle and Tim in paying off their high interest loan over a period of several days. They were informed by the high interest loan company’s loan representative that they would need to obtain a debit card that took international payments. When Michelle and Tim, with the support of our KLPP Supervisor, called to make their payment, they were informed that their loan payment was actually not the initially agreed upon pay-off price and the loan representative requested an additional $400.00 for a full payoff.
Our KLPP Supervisor advocated for Michelle and Time and provided full documentation of previous phone calls to the high interest loan company’s customer service department. The company then committed to take the initial agreed upon payment. After a one hour conference call and the couple paying off the loan with an interest rate of 1325%, the loan representative attempted to offer Michelle and Tim another loan! They happily declined. They now have a refinanced small dollar loan through Country Club Bank with an interest rate of 6% and made their first loan payment this month!
The Kansas Loan Pool Project (KLPP) is designed to help eliminate high-interest title or payday loans by issuing participants a new, low-interest loan. Each participant is enrolled in a financial education series to help develop a long-term financial plan and budget. They are also assigned a Catholic Charities case manager specialist to provide ongoing monthly support. Interested in finding out more about the KLPP program? See details on our Financial Education page.