Redcar man in need of new shoes beats the pay day loan companies thanks to new finance scheme

Darlington and Stockton Times: Loan officer Janice Dawson with Coast & Country tenant Paul Wilson Loan officer Janice Dawson with Coast & Country tenant Paul Wilson

AN UNEMPLOYED man who needed to borrow money to buy a pair of shoes says he has been saved from a payday loan trap thanks to a new community borrowing scheme.

Paul Wilson, 39, of Dormanstown, Redcar, needed to borrow £100 for shoes and to pay his energy bills.

He was about to contact a payday loan company who typically charge more than 4,000 per cent interest on very short-term loans, but instead was told about a new fair loans scheme run by Coast & Country Housing Association who charge at 69.5 per cent.

Coast and Country Housing has launched the loans initiative with social enterprise My Home Finance, as part of a wider campaign against high-interest lending.

The My Home Finance scheme is for people who would not normally be considered for a loan from a conventional source such as a bank or credit union.

Mr Wilson, who volunteers for community project in an attempt to improve his chances of paid work, has started taking in lodgers so he can still receive housing benefit, countering the effects of the so-called bedroom tax.

He said: “My Home Finance provided me a financial lifeline. If it had not been available I am sure I would have had to resort to a payday loan.

“The Coast & Country loan deal saved me from ending up on the payday loan treadmill having to take out one payday loan after another to meet the exorbitant interest rates.”

Iain Sim, Chief Executive of Coast & Country, said: “It is gratifying to see that the My Home Finance scheme is having a positive effect and is giving tenants, such as Paul, a more reasonable alternative to the payday lenders and doorstep ‘loan sharks.’”

My Home Finance has been set up by the National Housing Federation, to address a ‘credit gap’ for people that need small loans, whose credit history may prevent them from getting a loan from a bank or credit union.

Loan officer, Janice Dawson is based within the Rents and Benefits team at Coast & Country’s headquarters at Ennis Square, Dormanstown, Redcar.

Comments (4)

Please log in to enable comment sorting

10:18pm Mon 24 Feb 14

rennard@ntlworld.com says...

69.5% interest sounds like loan sharks with a licence to me
69.5% interest sounds like loan sharks with a licence to me rennard@ntlworld.com
  • Score: 16

10:22pm Mon 24 Feb 14

rennard@ntlworld.com says...

69.5% sounds like taking advantage to me
69.5% sounds like taking advantage to me rennard@ntlworld.com
  • Score: 10

7:59am Tue 25 Feb 14

Davy Crocket says...

69.5% is misleading. It should instead say something like £1.25 per week interest which is low for such a small loan.
69.5% is misleading. It should instead say something like £1.25 per week interest which is low for such a small loan. Davy Crocket
  • Score: 0

12:32pm Tue 25 Feb 14

Ally F says...

Correct DC. Interest rates are expressed as APR, Annual Percentage Rate, which is a useful benchmark for long-term loans such as mortgages. It's an irrelevant benchmark for short-term loans intended to be paid back within days or or a few weeks at most.

Wonga's typical simple interest is 1% per day, or 365% simple interest per annum. 69.5% APR is much more favourable, at 0.19% simple interest per day. Wonga and other payday loan companies profit from the most vulnerable in society, charging extortionate default penalities if the payment deadline is missed. Credit Unions are a much more ethical alternative.
Correct DC. Interest rates are expressed as APR, Annual Percentage Rate, which is a useful benchmark for long-term loans such as mortgages. It's an irrelevant benchmark for short-term loans intended to be paid back within days or or a few weeks at most. Wonga's typical simple interest is 1% per day, or 365% simple interest per annum. 69.5% APR is much more favourable, at 0.19% simple interest per day. Wonga and other payday loan companies profit from the most vulnerable in society, charging extortionate default penalities if the payment deadline is missed. Credit Unions are a much more ethical alternative. Ally F
  • Score: 5

Comments are closed on this article.

click2find

About cookies

We want you to enjoy your visit to our website. That's why we use cookies to enhance your experience. By staying on our website you agree to our use of cookies. Find out more about the cookies we use.

I agree