Imagine a Future Free from Predatory Lending
Tennesseans pay as high as 460% APR on more than half a billion dollars in predatory consumer loans.
Our mission is to create a fair and equitable alternative to– and means out of dependence on– predatory consumer loans like payday, title, flex, and tribal loans.
but what does that mean?
The Problem
The crux of the problem is that a borrower in Tennessee can take out a $4,000 predatory loan, pay $930 per month or more, and not pay down the loan by a single cent.
We estimate that every year there is north of $500,000,000 in predatory payday, title, and flex loans disbursed or outstanding in our state, draining more than $1,000,000,000 in interest and fees from economically vulnerable communities every year.
BetterFi’s Solution
We have created a nonprofit alternative that can break even at scale: a potential permanent answer to predatory triple-digit-APR payday, title, flex, and tribal loans.
Whereas a borrower of a predatory $4,000 flex loan might pay $930 every month in interest and fees indefinitely, a BetterFi client would pay 87% less in interest the first month, less after that, and, with twelve payments of about $401, would pay off the $4,000. Lower payments and paying down.
The interest paid to BetterFi over the course of the whole year would be less than one month of predatory interest and fees.
$11,180
potential interest and fees paid over one year on a predatory $4,000 flex loan without touching the principal balance
$811
potential interest paid over one year on an amortized $4,000 BetterFi loan paid all the way down to $0
$1,333,298
in credit disbursed to the underbanked
$3,204,210
saved by clients vs predatory interest & fees
Help us combat predatory lending one day at a time.
The Nuts & Bolts
Quasi-market solution, economic justice enterprise, micro-finance institution, or social entrepreneurship initiative:
Whatever you want to call it, our model rests on a few key parts:
501(c)(3) nonprofit status ensures that there are no shareholders and there is no profit maximization motive: our guiding principle is our mission.
Community Development Financial Institution (CDFI) status and other Program Related Investments (PRI) enable BetterFi to access below-market-rate financing that can be used to fund the loans that we make, reducing some dependence on donations and grants.
Unique and novel underwriting combining artificial intelligence and common sense lets us sidestep the traditional credit underwriting hurdles that limit access to those considered risky by conventional institutions while maintaining responsible decisioning.
Fair credit pricing and flexible terms that save clients substantial money while encouraging full and quick repayment create viable routes out of debt traps while realizing a net interest margin that can cover operational expenses at scale.
We are working on more explanatory videos, but in the mean time more information can be found on our News page, by subscribing to our newsletter, or by reaching out.
…and with help:
