Reese* first took out a payday loan to stay on top of the bills in her life. Unfortunately, the “short-term” loan quickly spiraled into a debt trap. That’s because Reese couldn’t afford to pay the entire principal and interest of her loan in one payment. Instead, she paid a fee to renew her loan for another few weeks, and eventually, she became stuck in a costly renewal cycle.
“[The lenders] had it where I was able to come in and make the payment, and they’d pull it back out. They didn’t say that that restarts everything all over. And that’s where the issue was… I couldn’t afford to pay and just leave it, I had to pull it back out.”
Reese remained in the payday loan debt trap for months. Then, she learned about Exodus Lending, and Reese decided to join our program and finally break the cycle.
*We have changed the participant’s name because of confidentiality.
Despite countless stories like Reese’s of people struggling with payday loans, payday lending is still legal in Minnesota and, as you can see in a recent Star Tribune article, an effective statewide 36% interest rate cap is unlikely to pass in the current legislature. So, until payday lending is (finally) illegal in Minnesota, Exodus Lending will continue to provide a just pathway out of predatory debt.
“Exodus Lending is nearing our 500th participant, serving people in 36 counties, and we have saved participants over $1.1 million in fees and interest that they would have paid … in the year that they worked with us. [Payday lending] is a small-town as well as big-city issue that also disproportionately hits people of color.”Sara Nelson-Pallmeyer, Executive Director
While we move ever closer to being able to safely gather in-person again, we’re still available to meet with you all virtually! It’s easier than ever for one of our team members to join a call and speak to your group about our work. So if you’re interested, please reach out to include Exodus Lending in an upcoming virtual meeting, event, or faith gathering.
In case you missed it, here are some of the latest news items on predatory lending:
Exodus Lending’s office remains closed. Our team is working remotely and can be reached by phone at (612) 615-0067 or by email at [email protected].
Exodus Lending E-Newsletter: April 2021