Hi: 12° Lo:6°
By Ian Dipple Friday 14 December 2012 Updated: 14/12 10:15
HARD-PRESSED residents are being urged to stay away from costly payday loan companies.
South Warwickshire Credit Union - formerly Studley Credit Union - has criticised firms which offer short-term loans to people and then charge, in some cases, interest rates in excess of 4,000 per cent. By law credit unions cannot charge more than 26.8 per cent APR and typically charge between 12 and 18 per cent APR.
With Christmas on the way the union - which is a not-for-profit organisation - fears cash strapped residents will be tempted by the prospect of access to easy money and then find themselves trapped by extortionate interest rates.
About five million people in the UK will consider payday loans in the next six months according to research, with one in three having to take out a second loan to pay off their first. In one case a local man took out a pay day loan of £250 which ballooned to a debt of more than £1,000 in just a few months as several pay day loans from different lenders were rolling over monthly and increasing rapidly.
Stratford Citizens' Advice Bureau recently released figures which showed in the last financial year it dealt with more than 500 debt queries from residents in Studley and Alcester alone.
John Broughman, chairman of South Warwickshire Credit Union, said: "We’re seeing professional people with good salaries brought to their knees by these legal loan sharks.
"The temptation of slick TV adverts will be there for many people – particularly in the run up to Christmas when family finances can be stretched – but our advice is to steer clear. People with unmanageable personal debt shouldn’t stick their heads in the sand. The Citizens Advice Bureau should be the first point of call where they will give clear and sensible advice."
The union has more than 1,200 members and offers an accessible, low-risk, easy place to save money as well as low cost loans of up to £5,000 at affordable rates. Unlike banks it has no shareholders so any profits can be returned to members in the form a dividend.
Joining costs just £1. Email firstname.lastname@example.org or call 01789 261505 for more information.
PATIENTS were evacuated from the Alexandra Hospital after
HOSPITAL bosses say they understand and share the
THE CHAIR of the Save the Alex group
CAMPAIGNERS fighting to save services at the Alexandra
A BROMSGROVE boy who is just five has notched up ...
COUNCIL chiefs have branded cash for communities affected by HS2 ...