How Financial Institutions Can Structure Small-Dollar Credit for Financial Health
Recent regulatory developments have opened opportunities for lenders - particularly banks - to offer small-dollar credit. Data shows that investing in customers’ financial health results in greater long-term loyalty and profitability. In this brief for financial institutions and other lenders, the Financial Health Network offers a series of recommendations for supporting the short and long-term financial wellness of small-dollar credit customers.



Top Takeaways

Now more than ever, supporting the financial health and stability of people who need small-dollar credit is critical – for consumers and for lenders. Recommendations included in the brief include:

Setting everyone up for positive outcomes with affordable payment structures and no balloon payments

Evaluating the circumstances of each prospective borrower to make sure a small-dollar loan is the right fit

Ensuring products serve as a financially healthier alternative to overdraft protection for consumers struggling with liquidity

Developing and offering financial resilience products alongside small-dollar credit to advance financial health in the long-term

Policy: Where Insights Become Impact

The Financial Health Network creates connections between the business and policy communities to drive responsible innovation of quality products that further the financial health of everyday Americans. Discover how mutual understanding and well-designed regulations can create a more secure financial future for us all.

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