HFLA believes that personal vehicles are crucial for an individual’s personal autonomy and ability to maintain financial security and a steady income. With the current state of the new and used car market, auto loans have seen some of the highest spikes in interest rates, causing financial hardship for many in our region, making ownership of transportation nearly impossible. 

To address the increase in used car interest rates, HFLA of Northeast Ohio has developed a sub-type of our Standard Loan to specifically address the purchase of a used car when the interest rate that is accessible is deemed to be burdensome. 

Auto Loan qualifications are the same as any other Standard Loan. The applicant will need to first apply for a traditional auto loan (at their bank, credit union, etc.) and prove that they have no access or that the terms that were offered to them are predatory or excessively burdensome. Applicants must apply with a guarantor. The two most important factors in being approved are the applicant’s ability to afford a loan repayment and evidence that they will meet this obligation based on their credit history and the interview process.

HFLA will offer a higher maximum loan amount of $15,000 and longer loan terms up to 60 months for Auto Loans making loan repayment no more than $250 a month. HFLA often sees car payments of $500-$700 with interest rates at or above 17% with excessive loan terms of 72 months. This can be detrimental to a household’s monthly cash flow and short and long term savings. Additionally, sale prices for used vehicles have been heavily inflated in 2020 and 2021.

HFLA will work closely with applicants to emphasize key information throughout the application process. It is our goal to make sure that a potential borrower is considering the additional costs that come with a car such as: fuel, tires, oil changes, insurance, repairs, etc as part of the projected monthly budget. Other introductory information about vehicle shopping and ownership may also be offered to clients throughout the application process or after approval to aid and benefit first time drivers in particular.

Ideally, HFLA will be able to capture interested applicants early in their search for a vehicle so that they can shop and negotiate with the confidence and readiness of a pre-approval. By applying with HFLA quickly after pursuing traditional financing, the individual’s hard credit inquiries will be less impactful.

This loan is available now. Inquiries can be made by email or phone. 

team@interestfree.org

216-378-9042 Option #1

Credit scores and credit checks hold many back when it comes to fulfilling their “sueñitas” (dreams).

While I was watching In the Heights, the newest Broadway Musical turned movie from Lin-Manuel Miranda, there was one scene in particular that stopped me in my tracks. It wasn’t one of the beautifully choreographed dance scenes, which were also heart stopping. It was a scene that gets to the heart of what HFLA of Northeast Ohio does–help people with bad or no credit. Here is a brief synopsis: SPOILER ALERT!

Vanessa is a young Latina woman living in Washington Heights, in New York City. She works at a salon, but dreams of moving downtown and becoming a fashion designer. She sees this move as a way of elevating herself and moving up from her neighborhood which she thinks is holding her back.

When submitting her rental application, she is rejected due to a poor credit check and is told that she would need to apply with a co-signer.

Realtor: Ah, Ms. Morales.

Vanessa: Yes.

Realtor: I’m sorry honey, I meant to call you.

Vanessa: Oh, I’ve got bank checks. First month, last month, and security, good as cash. 

Realtor: It’s just without a solid credit check, there’s not much I can do. Maybe your parents could co-sign, assuming they can prove income 4 times the rent? You know what, get it to me by 5, I’ll see what I can do. 

Despite the fact that Vanessa can prove that she can afford and reliably pay for this apartment, the credit check automatically excludes her from being able to lease the apartment independently. Vanessa does not have any family to ask that could act as a co-signer, and is either too embarrassed to ask someone else or doesn’t think anyone in her community would even be able to co-sign for her.

Seeing this scene unfold is so crucial; it authentically illustrates a real issue that many people face.

As an HFLA staff member, I was shocked to see this plot point in a popular movie, let alone a groundbreaking Broadway musical. We live in a world that does not like to talk about money in a real sense. The narratives we typically see in movies and TV emphasize the character’s poverty and “struggle” more than the systemic barriers that keep them in this cycle and prevent financial growth.

The Difference HFLA Makes

While we do not rent apartments, HFLA of Northeast Ohio has been providing 0% interest loans since 1904. We have never considered a 3-digit credit score as an indicator of an individual’s ability to successfully repay a loan. Instead, we look deeper into the applicant’s repayment history, and more importantly, their current ability to repay a loan based on their income and expenses. We understand the difficulties surrounding building credit. For example, paying rent, utilities and cell phone bills on time does not add to your credit score, but evictions or being sent to collections for not paying bills does. More importantly, we understand the difficulties life can throw at a person, how events and unexpected circumstances can derail one’s dreams and have significant financial consequences.

Though HFLA does not rely on a credit score to determine loan eligibility, we do require that all loan applicants sign with a co-signer or guarantor. HFLA is a non-profit organization that charges 0% interest, we count on the loans we disburse being paid back so that these funds can be recycled and disbursed as new loans to others. For HFLA, co-signers provide security for our funds and lending model. However, we do see first hand how this is a barrier for many, even though we have the same standards for co-signers as we do for borrowers–the credit score alone is not a determining factor.

Co-signers do not have to be family. They can be trusted friends or even community leaders. Co-signers are people who step up, and believe in the dreams of their community. HFLA wants to take a moment to praise and acknowledge all of the co-signers who have stepped up and believed in our loan recipients. All of these individuals did so much more than provide security for HFLA, they played an important role in helping build someone’s personal credit and ability to grow wealth.

HFLA understands that it can be a risk to co-sign for someone, but this risk can uplift, support, and grow one’s community, helping our neighbors achieve their sueñitas.

As the plot of In the Heights unfolds (and I will try to not give too much away) Vanessa’s friend finds her rejected rental application. He takes it to Vanessa’s boss to ask her to co-sign, which she does. This allows Vanessa to live her sueñita, and get her dream apartment downtown.

Our Advice: Know What is in Your Credit Report!

Check out these tips from HFLA Program Director, Brady Gasser.

Find more tips at Nerd Wallet.

1. Know what is in your report and how it affects you.

• Reports are available for free on a weekly basis until April 2022.
• Evictions are particularly detrimental for renters.

2. Know immediate actions that you can take.

• Pay down revolving accounts if possible (i.e. credit cards).
• Pay off derogatory accounts if possible (i.e. collections, charge-offs).
• Check for accuracy and report disputes when appropriate.

3. Know what habits you need to instill over the long-term.

• Make on time payments.
• Keep overall credit utilization low.
• Be careful about taking on debt and look for alternatives.

Even in the earliest months of the pandemic, it was clear that the COVID-19 pandemic was going to wreak havoc on the economy. In April 2020 alone, 20.5 million jobs were lost. What was not anticipated was that 55% of those jobs lost were women. Women of color were hit hardest of all. Unemployment rates for Black women increased to 16.4% and Hispanic women to 20.2%. The numbers have not gotten much better since then, sending women back into precarious financial situations. 

Women in the United States were already financially vulnerable. In addition to the burden the pandemic put on individuals, many women were forced to serve as the caregivers for children or their parents. This put working women in a situation where they were unable to produce an income or were otherwise required to be financially dependent on another.

Persistent gender roles around money leave women particularly exposed. Eight in ten women in the US will be solely responsible for managing their finances at some point in their lives. Yet, 56% of women–61% of millennial women–abdicate major financial decisions to others. Women 65 and older are 80% more likely to be impoverished than men of the same age. Low-income women and women of color face heightened barriers to building and maintaining wealth.

The challenges that women face when it comes to personal finance are troubling. The reasons behind it are varied and often ingrained in society. In addition to being steered into lower-income careers and basic inequities in pay, women are less educated in basic financial management. 

In October 2021, HFLA of Northeast Ohio hosted a virtual screening of the 2021 documentary film, $avvy. $avvy questions why women often take a backseat to managing their money by investigating the historical, cultural, and societal norms around women and money in the United States. The virtual documentary screening for $avvy took place October 10, 2021 and was free for registered guests. Robin Hauser, the film’s director, joined a local panel of women to discuss the economic status of women in Northeast Ohio and how we can improve women’s financial empowerment. 

HFLA of Northeast Ohio’s mission is to provide interest-free loans to promote the economic self-sufficiency and growth of Northeast Ohioans who are unable to access safe and fair lending resources. We provide three loan types: Standard loans to address financial situations that may arise; Business loans to entrepreneurs starting a business; and Education loans to students in Northeast Ohio. Sixty percent of all of our loans go to women, with 70% of all COVID-19 Emergency Loans in 2020 going to women.

In hosting the viewing of this important documentary film, HFLA seeks to bring light to the lack of women’s financial literacy and autonomy and have actionable conversations on how community organizations can work together to strengthen Northeast Ohio women’s financial independence. Please join us for this important conversation. 

Watch the trailer here: finishlinefeaturefilms.com/savvy/

Stream the film! Available from December 1, 2021-December 21, 2021: Whistler Film Festival | $avvy

Get involved, contact us:

Assistant Director: Carrie@interestfree.org

Development Manager: Hillary@interestfree.org