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IDA Secured Loan
When my car broke down, I was able to take out a $500 secured loan based on the savings I had in my IDA account with BSAFE at the credit union. I was able to pay back the loan in less than a year, but more importantly, I was able to build good credit in my own name. With this help, I was able to get a credit card in my own name. Most important is the personal ethics that everyone shows as they help you get back on your own feet and become the independent person you once were. With Gratitude, Deb
Loan Amount: Up to savings in IDA account at time of loan distribution
Interest Rate: 2% above rate earned on IDA savings account; minimum of 4%
Term: Paid in full before qualified IDA withdrawal
Target Market: IDA clients
Prerequisite: IDA savings account
The secured loan is offered by Building Security through Assets and Financial Education (BSAFE) through a partnership with TriCo Educational Federal Credit Union (TriCo) and makes it possible for a client with bad or no credit to receive a loan with no risk to the credit union. If the participant defaults on the loan, the money in the IDA account is used to pay off the loan (and the participant is immediately dismissed from the IDA). Savers are eligible for a secured loan if they have IDA savings at TriCo and can show demonstrated need to either build their credit or for an unexpected expense (like a car repair) not within the IDA emergency withdrawal guidelines.
Building Security through Assets and Financial Education (BSAFE) is a project of Montana Legal Services Association and Montana Credit Unions for Community Development. BSAFE offers IDAs to low-income survivors of domestic violence living in Broadwater, Jefferson, and Lewis and Clark Counties of Montana. BSAFE knows that there are a combination of factors that make it hard to escape a constant cycle of hardship: poverty, a lack of financial education, and financial dependence. The IDA Secured Loans was developed in 2006 to meet the needs of IDA savers who needed small loan for non-emergency situations or in order to build their credit.
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