RICHMOND, VA (WWBT) - You probably go to Goodwill to donate clothes or buy second hand items. Now you can go there for a loan and some help to get out of debt.
GoodChoice loans are small, short-term loans paired with free money management classes. Goodwill, Virginia Credit Union, and St. James's Episcopal Church first offered them to their employees earlier this year. Now they're open to anyone who lives, works or worships in Richmond.
Single mother Marcella Hairston racked up debt on 10 different credit cards.
"With me having so many credit cards, I didn't have enough money to live. I was living above my means," said Hairston.
So she applied for a GoodChoice loan with lower fees and a longer payback period than an average payday loan. She took the program's free money management classes and has paid the loan back.
"I was able to do that within almost 2 months and then I was able to start on doing my credit report, put myself on a budget, not just a regular budget, a financial plan," she said.
Goodwill Industries, Virginia Credit Union, and St. James's Episcopal Church are offering GoodChoice loans and free credit counseling, through ClearPoint Credit Counseling, to help people get out of debt. Typical payday loans charge $15 per $100 borrowed, are due back in two weeks, and are frequently rolled over. GoodChoice loans charge $12 per $100 borrowed and are due back in 45 days. Only two rollovers are allowed.
"We would only allow you to borrow one GoodChoice loan at a time, and you must wait five business days between borrowing each loan," said Rachel Schultz with GoodChoice loans.
The GoodChoice loans come with free credit counseling and a mentor.
"How to manage your monthly budget, how to set financial goals for yourself, and to create a savings account. In the second class they really dig deeper into managing your credit and using it appropriately and taking a look at some of your long term goals and set yourself up for success," said Schultz.
Class graduates are also eligible for a grant that pays off up to $150 of the loan. Hairston says the financial education classes turned her life around.
"Before I was living paycheck to paycheck. Now I have a savings, I have a checking. Now I can sit here and take care of myself, me and my child," said Hairston.
To qualify for a GoodChoice loan, applicants will need a recent pay stub, to write a post-dated check for the amount of the loan plus the fee, and to be a member or join Virginia Credit Union. You can find more information at Goodwill headquarters, 6301 Midlothian Turnpike, Richmond or by calling 674-2344.