How Aroha used a Good Loan to regain her independence
March 8, 2021
We spoke with Aroha about how a Good Loan helped her buy a car, get back on top of her finances and spend more time with her daughter.
“I don’t know where my daughter and I would be without my car. Knowing that I can just take my daughter to A & E (accident and emergency) if I need to, is really important to me. It’s given me so much independence.”
Women face a higher risk of financial hardship than men in almost every country in the OECD. Women are more likely to be single parents or caregivers, are overrepresented in lower paid industries, paid less than men in others, and have less confidence in their ability to manage money.
As an organisation committed to better futures for women and girls, we work in areas where women are more likely to experience disadvantage, including financial hardship. Our Good Loans programme is designed to provide fair and affordable alternatives to the high-cost loans that often lead to financial hardship, and 70% of our Good Loans clients are women.
“When I had to quit my job for my health I couldn’t keep up with my car payments. My car got repossessed, and I knew it was coming.”
The years Aroha didn’t have a car were difficult, and she hated having to rely on friends and family. She knew she needed a car when her daughter started school. “There’s no bus to her school. I don’t know what we would have done – our friends would have just got sick of us asking for help every day.”
Discovering Good Loans
Aroha heard about our Good Loans that are provided at her local Salvation Army. The Good Loans programme is a partnership between Good Shepherd NZ and BNZ, with support from the Ministry of Social Development. Community providers like The Salvation Army provide the loans directly to people in their communities.
Aroha needed to make an appointment to talk to a loan worker and make sure she had enough money to repay a loan without getting into further difficulty.
“The loan worker helped me sort out my bank account properly and we worked out a manageable budget together. It was so straightforward and she helped me with the whole process. It made a really big difference.”
Working closely with one of our loan workers helped Aroha determine where she needed to be more accountable for her money. It also helped her identify where her money was going and how she could structure payments more efficiently.
“I stopped spending money on junk things. The process teaches you to be more aware – it really made me know I needed to keep an eye on things.”
Aroha had also been paying her son’s fines but has since talked to him about taking responsibility for his own costs.
“His car was in my name, and now it’s in his name. He’s learning to manage his money too.”
Aroha had a less than perfect credit history after her earlier experience, but her loan was still able to be approved. “I had bad debts but I was paying them – because I was paying everything off it showed that I was making the effort to pay it. It was such a buzz when they said yes. A car yard would say yes – but I’d walk away with a car that I couldn’t afford.”
Why Good Loans are different
Aroha knew the difference between good and bad debt but found it hard to stop herself from getting into bad debt. “It is so easy to get into bad debt, and in the past, the finance company would just keep letting me top up. They want you to just keep borrowing. I like the fact that I couldn’t top up the Good Loan – I also liked that it went straight to the car company and not to me. I just filled in the paperwork and drove off.”
Our loan workers work with clients on the application to make sure the loan is suitable and the repayments will be affordable, and if approved we pay the supplier directly – making the process as simple as possible for our clients.
“For people including myself that haven’t got much money, there are automatic negative thoughts so it’s about finding somewhere that suits. I’d assumed from my bank it would have been an automatic no. When it’s a community social service thing, your mindset changes. Well I know The Salvation Army, I know them and their service, and that took away the stigma of it.”
The process gave Aroha a lot of confidence about managing her money. “Way more confidence. Even if I’d been declined, at least I knew I could try again in another year or so. It didn’t feel like you were going for a loan. You don’t feel judged.”
Since she has owned the car, Aroha has needed four new tyres, but because she is managing her money better she was able to pay for them herself. Aroha was also able to pay the loan off more quickly than she’d thought. “I was a bit ahead in payments. It felt so good to ring and make the last payment.”
Once she had paid off her car, Aroha felt confident using $5 a week to make payments on a cake mixer. “It’s something for me, for my daughter and me. We bake together – it’s our special time.”