I work at a small yet competitive credit union and am loving it, but I can’t go to sleep thinking of a member I worked with today and yesterday.
I have a member who came from South America about two years ago. He was recently in the last month or so issued an SSN and a US Employment Authorization. He was previously working for a paint company for cash and was jipped out of 6 weeks of work because his employer was aware of his undocumented status. He is now in the process of gaining asylum and earns about $5,000 a month working elsewhere.
We opened an account for him yesterday because he was wanting to leave a major bank and his friend referred him to us. Because he wasn’t paid what he deserved, he took a personal loan under the table from a someone in his country who is charging over 20%/month (yes, you read that correctly). Long story short, he needs about $9000.
He initially came in looking to apply for a personal loan to refinance/consolidate debt. His debt/income ratios were a little high but we’ve made exceptions for much worse. He is behind a month of rent, he is financing a car that is useless as collateral (balance is a little bit low than it is worth), and has other bills coming up in Dec.
Bottom line is:
1) He can’t get an unsecured credit card or a revolving line of credit because he isn’t currently a permanent resident or US citizen. If we had approved him for a loan, he would have had 22 months in term because that’s when his employment authorization expires. Thus, monthly payments would be high but he’s okay with it, though it is unlikely anyone would approve him.
2) He’s essentially looking to hold out as long as possible until January when he starts a new job that’ll bring in over $1,000/week.
3) We did pull his credit but all he has is his car loan (3 years left and APR of 22%). We didn’t think he’d have a FICO because he just got the SSN and his report says that he as insufficient data. He has one secured credit card that’s maxed out at $400 and he did have a FICO—it was a little under 600. We applied for a auto loan refinance but at best, he’d only save about 2-4% on his APR.
4) He doesn’t have anyone in his household he could use to co-sign for him but he might have a friend/family who could. Problem is they aren’t in town at the moment and he needs to pay the rent he owes ASAP.
Any advice or suggestions would be greatly appreciated. He really struck a chord with me and I wish I didn’t care as much but i sense his desperation. What would you suggest?