Borrowing money can be expensive – especially if your pockets aren’t deep at first.
Whether you’re trying to consolidate your debt or just pay off the rent, credit solutions like personal loans and credit card advances come with interest attached. Sometimes this interest is incredibly high.
If you find yourself in this situation, you may want to find out if your city has a Hebrew or a Jewish free credit association. You don’t necessarily have to be Jewish to qualify for an interest-free loan from any of these organizations.
A Brief History of the Hebrew Free Loan Associations
Hebrew free credit associations are a tradition adopted by Jewish immigrants from Eastern Europe. In America they date back to 1887, with many being established in the early 20th century.
These organizations were based on the idea that loans to those in need are just as important as donations to charity – if not more important in some cases. Supporters of these organizations refer to Leviticus 25:37 and say that Hebrew scriptures direct that such loans should be made without interest.
With this in mind, free credit associations give out interest-free loans to community members.
How These Interest Free Loans Work
Free credit associations have a fixed amount of money to lend. When someone applies for a loan and is approved, they repay that money with 0% interest.
The money then flows back into the loan fund so that the loan association can grant a new borrower another interest-free loan. In this way, the dollars are “recycled” to serve multiple members of the community over long periods of time.
To increase the number of people they can lend to, free loan associations rely on donations. These donations are tax deductible and can be made to any individual free loan association across the country.
Types of Zero Percent Interest Loans That Are Offered by HFLAs
A variety of programs are available at Hebrew Independent Credit Unions. You can apply for an interest-free loan for a number of reasons, including:
- Small Business Loans.
- Home improvement loans.
- Section 8 Home Loans.
- Debt Consolidation Loans.
- Loans to cover medical bills.
- Home Health Care Loans.
- Veteran Personal Loans.
- Student Loans.
- Private school tuition loans.
- Loans for continuing education and professional training.
- Loans for adoption and fertility costs.
- Loans to escape or recover from domestic violence.
- Loans for family emergencies.
- Wedding loans.
- Loans for funerals.
- Loans for other religious events.
- Personal loans during the COVID-19 pandemic.
This list is by no means exhaustive. The types of loans available vary depending on your local free credit association.
Even if you can’t find a program for your specific needs, you may still want to ask. Many of these organizations will try to meet the needs of the community whenever possible.
Where can I find a Hebrew Free Loan Association?
There is Dozens from Jewish or Hebrew free credit associations across North America. Some branches serve a single subway area, while others cover multiple states.
Some lend to all members of the local community regardless of religion, while others only lend to the Jewish community.
Interest-free loans in the US.
Out of the dozen of associations, here are U.S. locations that are awarded to all members of the local community:
You don’t have to be Jewish to apply for a loan at these locations.
Can You Get A Loan From A Hebrew Free Loan Association?
It depends on.
The subscription standards of Jewish associations for free loans are very different. Standards like credit scores and income eligibility vary not only from place to place but also from program to program.
For example, if you are served by the Los Angeles office, you can obtain a small business loan with a credit score of 580+. But if you are looking for one Veteran Loans You must have a credit score of at least 680 for this branch.
If you don’t meet your free lending association’s underwriting standards, you can hire a surety or co-signer to do so. At some locations, e.g. B. in Pittsburgh, securing your loan with collateral may be an option if you do not meet the underwriting criteria yourself and cannot find a suitable co-signer.
What are the loan terms like?
The loan terms will depend on your individual circumstances and the type of loan you want.
Student borrowers who are borrowing large sums for school may want to be aware that the repayment term with an independent loan association is often much shorter than the repayment terms for federal student loans. This means that even if you pay less, your payments are likely to be higher because you won’t be charged interest.
It’s also important to remember that if you borrow outside of federal programs, the loan will not be eligible for federal lending programs such as federal government programs Public lending.
The maximum amount you can borrow varies from program to program. For example, many pandemic programs with free credit associations across the country have credit caps. This is to ensure that the limited funding serves as many people as possible. If you need to borrow a large amount, you may need to look for additional sources of funding.
Brynne Conroy is an employee of The Penny Hoarder.
This article originally appeared on www.thepennyhoarder.com