Unexpected financial emergencies don't have to be massive to strain a household budget, but the impact is worse without access to credit. Surprise bills can lead people with limited borrowing options to costly alternatives like payday loans that may exacerbate the problem.
Greater Iowa Credit Union is offering a new small-dollar loan program for Iowa State employees, as part of an ISU Extension and Outreach pilot project to improve financial wellness. The program will ensure university employees have a choice when facing short-term financial difficulty.
The Wellness at Work Small Dollar Loan program, available through the credit union, offers ISU faculty, staff and post-docs a personal loan at an annual interest rate of 9.99%, no matter their credit score. Loans can be from $500 to $2,500, for terms of either 12 or 24 months. There is no origination fee or other added costs. Loan funds usually are available within 24 hours and often on the same business day as the application. Funds can be deposited in the borrower's account, or a check can be made out to a specific business.
"Our hope with the Wellness at Work Small Dollar Loan program is to make a difference for any Iowa State University employee who may need help getting through a financial situation they are facing, especially for someone who may have limited access to credit," said Suzanne Bartholomae, assistant professor of human development and family studies and human sciences state extension specialist.
Borrowers must apply in-person at one of the credit union's nine branches, including three in Ames. Though the credit score doesn't affect the loan decision, the confidential application includes a credit check to verify identity, residence and bankruptcy status. Borrowers must be Greater Iowa Credit Union members, which requires an initial deposit of at least $5.
Through its Financial Wellness at Work pilot project, ISU Extension and Outreach provides ISU employees with financial education and resources, such as workshops and one-on-one consultations. It is made possible, in part, by a grant from the FINRA Investor Education Foundation through a partnership with United Way Worldwide.
Greater Iowa Credit Union is an Ames-based, not-for-profit financial cooperative offering a full range of financial services. It has prior experience offering an employee-only small-dollar loan program and a historic connection to campus, being founded in 1932 by workers from the university's buildings and grounds crew.
"We are excited to continue our support of Iowa State University faculty and staff," said CEO Scott Zahnle. "People are at the heart of everything we do, and we are thrilled to further our mission of making financial stability attainable for everyone."