Millions turning to family and friends for financial help
Low or no credit scores limit loan options
InvestigateTV - More than 25 million people relied on loans from those close to them to meet spending needs, according to the Census Bureau’s latest household pulse survey on finances. That figure is up from 19.1 million people from the same time last year.
Kaben Clauson, the CEO of Pigeon Loans, said a big reason could be that a third of all Americans are in a group called “credit invisible”. The “credit invisible” either have no real credit history or have a credit score that’s been damaged, and they can’t get a favorable rate.
“The Americans come predominantly from black and Hispanic communities,” Clauson said. “To be frank, it leaves them with few options because traditionally a lot of them have to go to payday lenders or take loans that have really high interest rates and can be predatory.”
Clauson created the app and website, Pigeon Loans, to give families an option to make a legal promissory note that does the bookkeeping for them. The app automates payments and even lets users decide how much, if any, interest to charge.
If you are asked for financial help, Clauson advised you make sure your own financial house is in order, so you don’t get into money trouble yourself.
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