Don’t turn to loan sharks to escape debt, experts warn

Experts have recently warned families desperate for cash loans to not turn to illegal loan sharks as a way to escape debt.

Many people across the UK have been looking for quick loans in order to make ends meet lately.  Those in Sussex have been hit especially hard, with the result that local credit unions have stepped forward in an attempt provide succor to some currently courting loan sharks for their financial needs.

Savings and loans co-operative West Sussex Credit Union has announced it has set up ‘Life Raft’ loans in order to provide help to those in need of some extra money in between pay periods. ┬áThe instant cash loan is not so different than you would find from most other payday lenders operating in the UK, though credit unions and reputable payday lenders alike have been highly critical of unscrupulous lenders charging exorbitant rates to borrowers and providing access to credit to those who cannot easily repay such loans.

Credit unions and payday advance lenders may seem like strange bedfellows for uniting in condemnation of disreputable lenders, especially in light of new regulations being passed recently that grant more permission to credit unions. The new, more permissive rules allow credit unions to compete directly with financial services providers by allowing them to relax membership rules, offer paid interest instead of just dividends, and other similar changes.

Many credit union proponents welcomed these regulatory reforms, and efforts have been undertaken nationwide to begin billing credit unions as a viable competitor in the financial services industry by positioning the services offered by them somewhere in between the faceless, cookie-cutter High Street providers and the flexibility offered to customers by payday lenders.

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