A member came to the CDFI after being persuaded to take out a title loan to help her daughter. She is deaf and had long trusted her daughter with her finances, but the decision nearly cost her everything. Within days, she owed $4,900 under devastating terms: a 36-month loan at 203.39% interest, with monthly payments of $704.87, totaling more than $25,370 on $4,164 financed.
When staff explained the interest rate, panic set in.
Carolina Foothills refinanced her auto loan, providing 60 days of no interest and 90 days of no payments, while lowering her obligation to $43 per week. Earning $356 per paycheck folding T-shirts, the original payment would have meant losing her car, job, and home.
The refinancing prevented a cascade of loss triggered by a single predatory loan.
