Athens nonprofit The Ark is working to get the word out about the effort to combat predatory lending.
The Ark’s Common Wealth Athens program provides family financial planning for low-income families in Clarke, Oconee, Madison, and Oglethorpe counties. Stephanie Cockfield is financial education director at the organization; she says one priority is getting families out of high interest pawns.
“So, if you are considered a pawn rather than a loan, then you can get around that cap,” according to Cockfield. “Unfortunately, with a lot of the title pawns that are in the Athens area and all over Georgia really, we could see interest rates as high as 150% to 400% APR.”
Cockfield says those terms can lead to a seemingly never-ending cycle of debt for borrowers.
“I’ve worked with clients that will come to me, and they’ve been in this title pawn for two or more years and their balance is exactly the same as when they started. So, it might have been a $600 or $700 pawn at the time and now they’ve paid over $2,000 for it and their balance is still the same.”
The Ark’s loan program helps refinance those high interest payments to a 3 ½ percent interest loan.
For more information, visit AthensArk.org.
