Council starts new loan scheme to deter pay-day lenders
A LOCAL authority in Shropshire has introduced a new loan scheme aimed at turning residents away from high interest pay-day lenders.
Telford & Wrekin Council has invested £100,000 to support the new scheme, which is intended for people on welfare benefits who previously would not have been able to access low interest rate credit.
The council has worked in partnership with Just Credit Union to create the CUSmart Loan, which is designed to provide residents with an alternative to expensive, pay day and door step loans.
In the tradition of credit unions, successful applicants will be saving as they repay.
The offer covers:
• Small short-term low-cost loans
• Loans from £50 – £300
• Borrowed over a maximum of 12 months
• Borrower must save £1.50 per week for every week the loan is outstanding. The savings can be accessed when loan repaid in full
• Apr 42.6%
Cllr Bill McClements, Telford & Wrekin Council’s cabinet member for Finance and Enterprise, said: “What we are doing here is offering people an alternative. It is very easy to worsen your financial problems with misguided borrowing from lenders that charge high interest rates.
“By teaming up with Just Credit, we are giving people another option which is more affordable and doesn’t contain any hidden surprises. It is an initiative I very much welcome.”
Just Credit Union offers a range of affordable loans and each one includes a savings element to encourage lenders to put money aside to help them balance their domestic budget.
