Shocking total of pay-day loan debts

Sheffield Credit Union,  Jackie Hallewell

Sheffield Credit Union, Jackie Hallewell

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Sheffield advisors are seeing people with up to SEVEN pay-day loans each, who are trapped in a spiral of debt.

Sheffield Credit Union has joined The Star in backing a new bill - proposed by city MP Paul Blomfield - to regulate ‘rip-off’ pay day lenders which charge high interest rates for instant cash.

A third of people turned down for loans at the savings and loan co-operative were rejected because of their debts, including pay day loans, in the last eight months.

Jackie Helliwell, manager of the union on Commercial Street, said: “When people come to us for a loan we look at their income and expenditure, we do a basic credit check, but when we look at their bank accounts we often see they have multiple pay-day loans coming out.

“Some people we have turned down for loans have because its not appropriate have up to seven pay-day loans on a bank statement and quite typically it is four or five.

“For a start they can’t get credit anywhere else but the worst thing we see is how it messes up the bank.

“The lender will get paid but direct debits won’t and that causes overdraft fees on top of extortionate interest.

“We do see people in dire straits but we can help them in other ways.”

Sheffield Central MP Paul Blomfield’s High Cost Credit Bill suggests a raft of measures to regulate the pay-day loans market, including tighter controls on advertising and making all charges clear to customers.

The credit union - which has 4,000 members - can refer people to debt advice services and set up savings or budgets accounts.

It also offers loans from £100 to £1,000 at 26.8 per cent fixed APR, which are calculated on a declining balance.

Call 0114 2760787 or email admin@sheffieldcreditunion.co.uk for more information.

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