If the new year brings new worries about how to make ends meet, don’t be tempted to go to loan sharks. With repayment terms typically as much as 1000 per cent, sometimes a lot more – a loan of £300 could see you paying £3,000 over the year.
Local Credit Unions, by contrast, offer loans with a typical APR of 12.68 per cent, so repayments on a £300 loan would total just £319.80.
Alan Evans, of the South West Illegal Money Lending Team, said, “loan sharks may first come across as a friendly lifeline to those with money worries but their victims can be faced with extortionate interest rates or unachievable repayment periods. The penalty for defaulting is often intimidation or violence. Legal moneylenders have to be licensed by the Office of Fair Trading (OFT) and follow strict regulations. If you’ve borrowed money from an illegal source you’re under no legal obligation to repay the debt; if a lender is not licensed by the OFT they have no legal right to recover the debt.”
Kate Rowe, of Clivey Credit Union, explained the benefits of belonging to a credit union. “Our APR is 12.68% and we’re there to help you get back on your feet. When you’re in a position to be putting even a tiny amount away each week, after saving for just 13 weeks you can take out a loan at double the amount you’ve saved. One member told us that we’re like family to her. Realising what we can offer, she can see light at the end of the tunnel.”
For details of the Clivey Credit Union call 07905 636152. If you’re concerned about illegal money lenders contact the 24/7 hotline on 0300 555 222.