In 2024, Donna T. and her husband — credit union members since 2014 — stopped by our branch in Greenville, South Carolina, to inquire about auto refinancing. Assistant branch manager Kenneth Bradley was heading out for lunch, but he postponed his break to assist them. When he did, he uncovered a troubling predatory loan story.
During a family medical crisis, Donna had refinanced her vehicle through a high-interest lender to pull out some much-needed cash. She suspected at the time that she wasn’t getting the best terms, but since she didn’t have much credit history, and because the need was urgent, she proceeded with the loan. Almost immediately, the loan became a source of stress. Despite assiduously making her payments every month, Donna couldn’t seem to make any progress paying down the debt.
Donna wasn’t sure what she needed, but she thought Self-Help might be able to help. When Kenneth asked about her desired monthly payment, Donna said “anything under $800” would suffice. Surprised by this comment, since $800 is an awfully high car payment, Kenneth looked further and found that the interest rate on the loan was an astronomically high 176.82%.
Donna’s loan had been for a relatively modest amount: $5,265. But thanks to that sky-high interest rate, her payment was $800 each month, and she was on the hook to hand over a total of $38,383.01 to that lender over the four-year term of the loan. That’s more than $33,000 in finance charges, all for a loan of just over $5,000.
Kenneth knew there had to be something Self-Help could do to help Donna get out of this situation. Despite her limited credit history, Self-Help was able to refinance Donna’s loan at a fraction of the interest rate she had with the other lender. She was thrilled with the service and especially thrilled with the over $30,000 in savings.
At Self-Help, this story serves as a reminder to us all that unfair lending practices continue to harm consumers and drain wealth from communities across the country.
We’re glad to be able to work with members like Donna every day to help navigate challenging situations like these.
