A national program will make low-cost loans to buy or repair pre-owned vehicles available to low- to moderate-income working families in the Detroit area.
Matrix Human Services and Spectrum Child & Family Services will administer $6,000 car loans and $1,500 repair loans to families in Wayne, Oakland and Macomb counties through the Detroit Ways to Work economic empowerment program.
Ways to Work helps families with poor credit buy reliable vehicles. The program, which will be launched March 26, also requires applicants to take a financial education course as part of the loan process. Applicants are taken through the application process, given financial counseling on budgeting, credit repair education and financial planning.
Funding is provided through the Kellogg, Kresge, Wal-Mart and other businesses and foundations.
"Owning an affordable car can make a tremendous difference in the job prospects, quality of life and future aspirations of a low-income family," said Ways to Work president Jeff Faulkner. "We tie an affordable loan product to a critical family asset, the car, and then let the combination of high expectations, accountability and meaningful clients supports do the rest. The act of repaying a loan helps our clients build sound financial habits, reinforces personal responsibility, and helps them to build a payment history and improve their credit rating."
Ways to Work operates 55 sites in 23 states and has helped nearly 30,000 families get more than $60 million in affordable loans.
Approved loans come with a flat 8 percent interest rate repayment terms of 24 and 30 months. Typical monthly payments fall between $150 and $220, and borrowers can save $750 to $3,000 in interest fees.
The majority of loan recipients are single mothers.
"Reliable transportation is critical to breaking the cycle of poverty," said Marcella Wilson, Matrix president and chief executive. "When children and families have access to reliable transportation, incomes increase and access to education and health care improves."
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