Interest-Free Loans
An interest-free loan is just like any other loan with one significant exception - the borrower does not pay interest on the loan amount. Borrowers agree to a specified repayment plan, ranging from 20 months to ten years, depending on the type of loan. Each loan is secured by cosigners who vouch for the recipient and back the loan.
Why interest-free loans? In the Jewish tradition, helping people help themselves with an interest-free loan is the highest form of Tzedakah (charity); loans foster economic independence while preserving dignity. This tradition inspired Jews across Eastern Europe to form free loan societies. New York's Lower East Side immigrants understood how interest-free loans could help the members of a struggling immigrant community achieve economic self-sufficiency and banded together to found the Hebrew Free Loan Society.
Today, loans are made to people living near the edge. They target those who for the most part do not qualify for public benefits, but are unable to afford more than the bare necessities.