Tenants residing in Sherwood are soon to receive financial advice on how to stay away from excess debt during this festive season – and one recommendation may be to steer clear of instant payday loans, experts say.
With Christmas drawing ever closer, those living in the Sherwood region are being told to stay away from so-called ‘legal loan sharks’ such as doorstep lenders and providers of instant cash loans, with one group attempting to encourage Brits to swear off providers of quick loans. Staff from Town and Country Housing Group will be providing the advice to tenants from next week, after being given specialised training from Trading Standards subsidiary the Illegal Money Lending Team in Tunbridge Wells this coming Monday.
Payday lenders, which operate across the length and breadth of the UK, have fallen under fire from organisations such as Trading Standards and Town and Country, due to the high annual percentage rates these companies charge their lenders. However, what these organisations fail to point out is that the high APRs on these loans are misleading as to the actual repayment cost of the loan, since APRs are calculated to represent the cost of repayment over longer periods of time than instant payday loans, which are typically repaid after just a few days or weeks.
In fact, research has shown that the repayment of an instant cash loan is actually on par with the fees associated with an unauthorised overdraft fee. In some cases, the cost of repayment may even be less than having to pay an unauthorised overdraft on around £100, the average amount of cash borrowed by those that frequent payday lenders.