Tackling the loan sharks

IMG00374-20120322-1539When out delivering newspapers for Ken Livingstone over in Abbey Wood last week, I was shocked to find a flyer in the entrance to a block of flats, offering residents cash loans at an interest rate of 1,300% (I have removed the name and phone number of the company concerned to spare them any blushes).

This does appear just about legal, as it does at least say prominently what the interest rate is, and it does say clearly how much someone borrowing £100 would have to repay over ten weeks – a whopping £145, almost 50% more than they actually borrowed.

But another flyer from a different loan shark that I saw recently in Charlton did not give an interest rate at all, and even said that loans can be “secured on benefits”, whatever that means (which implies that if you fall behind on repayments your Jobseeker’s allowance, income support or other benefits would go directly to loan sharks: Nice One).

It is a shocking commentary on the state of our economy, and the desperate straits some Londoners find themselves in, that these loan sharks – both the legal ones and the less reputable – should be thriving, and people are willing to pay such crippling levels of interest for a short-term loan.

If anyone reading this is tempted to take out a loan through such an operator, please don’t. Use the Greenwich Credit Union instead (www.greenwichcreditunion.co.uk), which allows any saver who has been with them for three months to apply for a loan at an interest rate of 12.7% APR.

The annual interest rate quoted on the leaflet is a hundred times higher than that of the Greenwich Credit Union. Enough said.

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