A member came into my office in early October to discuss her current financial situation with revolving credit. She felt a great deal of shame and embarrassment sharing that her credit card debt had reached more than $22,000. She had fallen ill the year before and, unfortunately, had to rely on her credit card to live on.
She had since returned to full-time employment and had been diligent in trying to pay down the debt. Unfortunately, the credit card interest was consuming more than double the amount she was paying on a monthly basis. She shared that she had pulled into our parking lot twice over the past three months but could not bring herself to walk through the doors until that day. Knowing her payments were mostly going toward interest, and realizing it would take nearly 30 years to pay off the debt, she experienced sleepless nights and increased anxiety.
She brought her most recent credit card statement with her, and I noticed the interest rate was 23.00%. I explained our CDFI personal loan for debt consolidation, and we ran the numbers together to ensure the monthly payment would be affordable and practical. She was approved for $23,000 to pay off her credit card at an 8.49% interest rate over a five-year term.
This loan accomplished several important things for the member. Her interest rate was lowered by 14.51%. Her monthly payment over five years was $160 less than what she had been sending previously, freeing up income for other monthly expenses. She will now be able to pay off the debt in five years instead of 30. The relief she felt knowing there was light at the end of a dark tunnel was priceless.
The member was extremely thankful to Empower for offering a solution to what she believed was impossible. She was grateful to feel no judgment and expressed regret that she had not been able to walk in sooner.
