Imagine living paycheck to paycheck. Every two weeks you put aside money for rent, pay the utility bill, and have enough food in the house for two weeks. Now imagine if an unexpected tragedy hits. Family funeral, unexpected medical event, your window air-conditioning brakes in the middle of the summer and you have an infant.
Payday and title loan operations for people living in economic poverty are the only option to obtain emergency funding in a crisis. Traditional banks won’t touch them, and the credit score system is stacked heavily in favor of the wealthy. Feel free to google trend lines.
Getting what seems to be a short term loan to alleviate a crisis becomes economic slavery. Miss a payment? Prepare to have your only vehicle – your sole means of getting to work repossessed over a few hundred dollars. 29% interest per month? Completely acceptable and your payment doubles if you’re more than 15 days late as a penalty. What does this look like in real life?
A $900 loan costs over $1,800 over 6 months to repay – and that’s before penalties which are built-in and designed to accumulate in order to increase profits. Where do these profits go? Not to the neighborhood. It goes to companies and investors living thousands of miles away in upper class neighborhoods. The employees who work in these establishments are incentivized to create as much profit as possible off the backs of those with poor available choices and circumstantial pressure.
I believe Jesus has something different to say about economic freedom. The Jubilee Project believes in zero interest loans because making money off of money only extracts wealth – it does not build it. It’s also forbidden in scripture.
We give individuals loans to help them pay off their court fees to re-obtain their drivers license. This increases an individual’s chance to get a better job as they increase their agency and accessibility to new job opportunities and markets. We believe in giving zero interest loans for automobiles. The public transportation system in most cities creates a severe barrier to economic mobility. Trading a two hour commute time for a 20 minute drive saves over seven hours a week of unproductivity. That’s time a parent can spend with their child. That’s time an individual can be active in their local community. They become better citizens and a better neighbor.