Payday lite
The Philadelphia Inquirer
By Joseph N. DiStefano
Delaware banks are boosting funds to the “Loan Plus” short-term loan program run by nonprofit West End Neighborhood House Inc. of Wilmington at YMCA and Catholic Charities offices.
Wilmington Trust Co., TD Bank, Barclaycard, ING Direct, and United Way back Loan Plus, which has lent $160,000 to nearly 400 borrowers, up to three months each, at 15 percent annualized interest, since 2007.
Seven percent of borrowers have defaulted; the rest paid off or are on schedule, says West End spokeswoman Molly Keresztury. So far that beats the recent 10 percent loss rate at credit-card lenders like Bank of America.
But expenses are high, given the program’s size: $137,000 this year. Loan Plus hopes to leverage its costs by more than doubling loan volume this year, says Keresztury.
Pro lenders watch the loans. “We look over their shoulder, and pick up the phone when we need to say something,” Wilmington Trust vice president Beryl Barmore told me. “There hasn’t been much need.”