What is a lending circle? A lending circle is a zero-interest and zero-fee social loan that helps to establish or improve credit history and score. It can also serve as a savings vehicle for those who are motivated by deadlines or by working with their peers.
How does a lending circle work? A group of people meet and agree to contribute to a fund monthly. Each month a different member receives the money in the fund for his or her use. The lending circle is complete when each participant has accessed the monthly fund. In this way, every member of a lending circle is both a borrower and a lender.
El Centro de la Raza’s Lending Circles are open to anyone 18 years and older. Those interested in participating should:
- Attend one of the regularly scheduled informational meetings where they can ask questions and learn more about the program.
- Schedule a one-on-one intake appointment in which they will work with a counselor to decide if lending circles are a good fit for them and to which they will be asked to bring:
- A government-issued photo ID such as a driver’s license, passport, or consular ID
- Recent proof of income for one month (e.g., pay stubs, profit, and loss statement)
- Recent monthly bank statements for all accounts
- A voided check
- A social security number or ITIN
- Attend a formation meeting to create a lending circle and determine the monthly contribution amount and the monthly disbursal by group consensus.
- All participants are strongly encouraged to attend a Bank On-certified eight-hour financial education series.
Lending circles are available in English and Spanish.
For more information send an email to email@example.com.
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