Employer-Sponsored Small-Dollar Loans: An Assessment of Take-Up, Engagement, and Outcomes

This is one research brief in a series of five completed through the Employee Financial Wellness Programs Project. In this study, we focus on an employer-sponsored small-dollar loan (ESSDL) product, TrueConnect loans, aimed at providing employees an affordable credit alternative to payday, auto title, and other high-cost loans. We present and discuss results of our analysis of survey and interview data to capture employee and employer ESSDL experiences. The TrueConnect loan program offers small-dollar payroll-deducted loans through participating employers, providing workers with an alternative to high-cost loans. For employees who lack access to traditional financial services or who may not qualify for loans during financial difficulties, employer-sponsored loan programs provide a source of credit that is likely otherwise unavailable. TrueConnect loans help employees cover basic needs, likely reducing the risk for destabilizing hardship events. Employees perceive their employers positively as a result of having access to the loan program and experience peace of mind knowing that loans are available should they encounter financial challenges. Further, payroll deducted loan payments help establish a consistent payment history that will have a positive effect on credit scores. Finally, TrueConnect offers clients the option of pairing their loans with financial counseling provided by a non-profit partner to help employees address fundamental financial challenges that these loans alone cannot solve, a solution that may be valuable for these workers.

Project: Employee Financial Wellness Programs

This work was originally published by scholars with the Social Policy Institute at Washington University. The Institute integrated with the Center for Social Development in January 2025.