Ypsi-based app aims to fight predatory lending by facilitating peer-to-peer microloans

School uniforms, groceries, medication for grandparents, gas, and dental surgery are just a few things Washtenaw County residents are receiving loans for through a newly launched peer-to-peer microlending platform called HelpPays. 

"We have had everything from students needing money for books, people having car issues, to single parents needing money for their kids' school supplies," says the app's co-founder, Ypsilanti-based Emmanuel Aubrey. "A large number of Americans do not have enough money set aside for an emergency over $1,000. HelpPays is a way to address a need that we're seeing not just in Washtenaw, but nationwide."

HelpPays' slogan is "Anyone can lend to anyone." The idea is to open up financial access for people who are unable to get credit through traditional means, or want to get credit at a lower rate. HelpPay lenders and borrowers communicate between themselves to determine terms that are most comfortable for them. Borrowers set their own rates, which the app caps at a 30% simple interest rate.

"By contrast, the experience overall of most lenders is typically exploitative. And, depending on who you see, it can sort of be a very aggressive form of lending," Aubrey says. "So, not only are the interest rates predatory, but some of the practices can include having people who come to your house and harangue you if you've missed a payment."

He explains that using simple interest over APR keeps everything straightforward for users. Since HelpPays borrowers will only ever owe the interest that was agreed upon, there's less anxiety about going into further debt if they are unable to pay. Lenders are also protected because they are assured a set amount of money. HelpPays doesn't use a collections agency, but instead gives lenders more peace of mind through an option to write off a loan loss as a tax-deductible donation.

Since the app launched last month, about 50 loans have been made. Many of them were funded within hours of borrowers' requests, but most of them have been financed within one to two days. Aubrey reports that several borrowers have even already paid their lenders back in full. He also says that almost every borrower has reached out to thank HelpPays, and their lender, for assisting them through their troubling financial crisis.

"It's been rewarding, because our long-term goal is to make it so that people who are currently borrowing can not only access the resources to credit that they need now," he says. "We want people in Washtenaw to build relationships, network, and help each other move toward financial mobility."

Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at jaishreeedit@gmail.com.

Photo courtesy of Emmanuel Aubrey.