HOUSING FOR WOMEN

residents and service users

FINALLOG

 

Warning! Avoid Loan Sharks at all costs!

GIVE LOAN SHARKS A WIDE BERTH

At last year’s Tenants’ Day Damon Gibbons from the Centre for Responsible Credit outlined the huge pitfalls that are out there for people using payday loans.

 

Eye watering levels of interest

The average payday lender charges £25 interest for every £100 borrowed. That’s an interest rate of 1,737% if you pay it back within one month. Compare this to the average credit union whose interest costs £2 for the same amount.

Failure to pay the loan back can quickly lead to unmanageable debt

If you don’t pay the loan back on time you are likely to be offered an extension, meaning more interest and probably other fees. Costs can quickly spiral out of control. They can ruin future chances of borrowing. Taking out a payday loan could jeopardise your credit rating and late payments will be listed on your record, making it difficult for you to get responsible credit in the future.

Need help?

Visit the Money Advice Service www.moneyadviceservice.org.uk or call 0300 500 5000 for lots of practical advice and information on managing your finances.

Make a stand against payday lending

As high street banks tighten up on lending, payday lenders are filling the gap. That often means targeting poorer borrowers who have few alternatives if they find themselves short at the end of the month. Cuts to benefits this year could mean that more people turn to payday lending providers to make ends meet. Research by consumer watchdog Which? found that 60% of people who took out payday loans were using the money to pay for household bills or buying other essentials like food and nappies.

We all need help with managing our budgets from time to time, but taking out a payday loan will only make matters worse. If you need financial help your local credit union is an ethical and cheap alternative. Find out what they have to offer by contacting them at the Association of British Credit Unions at www.findyourcreditunion.co.uk.