MINNEAPOLIS (AP) — Sky-high interest payday loans are getting some more affordable competition in the Twin Cities area from community-based organizations.
Minnesota Public Radio reports that Exodus Lending is one nonprofit offering residents interest-free loans to help pay off debts. Exodus Executive Director Sara Nelson-Pallmeyer says the organization has helped about 200 borrowers since April 2015.
Village Financial Cooperative plans to open a credit union next year. Village Financial development director Me’Lea Connelly says the credit union’s goal is to increase access to banking services, including low-cost, short-term, small loans.
There are at least five credit unions in Minnesota that already make small-dollar or auto loans to people wouldn’t normally quality for a loan.
Payday lenders argue that high interest rates are necessary to make small loans worthwhile.
Information from: Minnesota Public Radio News, http://www.mprnews.org