Mark S. Allen, Chairman of National Black Wall Street Chicago joined Chicago City Treasurer Stephanie D. Neely and others in announcing a new partnership with Illinois Service Federal (ISF) to offer an alternative to payday loans that gives community borrowers more time to pay back the loan at a lower cost.

 

Nearly 1 in 4 Illinois residents have no savings or other assets to help them survive a financial crisis. These are the people most likely to take out a payday loan, and pay the extraordinarily high interest rates, sometimes as much as 400% APR.

 

The Treasurer’s Office – ISF partnership has two main goals:  1) To demonstrate that mainstream financial institutions can successfully offer a better and safer alternative to payday loans – one that provides borrowers more time repay at a lower cost; 2) A secondary goal is to show consumers the benefits of developing and maintaining a good relationship with a bank.

 

A kickoff event to announce the partnership occured on April 17, 2013 at Illinois Service Federal’s main branch. The details of the event were announced

      Wednesday April 17, 2013 at 4pm 

 Illinois Service Federal Main Branch

                  4619 South Dr. Martin Luther King, Jr. Drive

                  Chicago, IL 60653

 

“The people who can least afford these exorbitant charges are the ones most likely to be caught in a crunch,” says Treasurer Stephanie Neely. “It makes financial sense to help them keep more of their hard earned money.”

 

Payday loans are 2-week loans between $100 and $1000 and cost in upwards of $15.50 per $100 borrowed.  More than 100,000 people in Illinois use these loans each year.   Often people use these loans for emergency situation and do not have time think about their ability to afford the loan’s high cost.  For example, a $200 loan will require you to pay back $230 in 2 weeks.  If you are unable to pay, the lender will generally extend the term for 2 additional weeks and add an additional $30 fee.  The cycle continues and often many borrowers find themselves in vicious cycle of mounting debt