Alternative to high-interest loans launched
A new finance initiative will offer an alternative to high interest payday loans.
The cooperative has launched a Freedom Loan, in a bid to break people’s dependence on short term loans which hook people up to punishing interest rates.
And Portishead based Somerset Savings and Loans are now offering the loan to its members.
Its Director, Paul Urch, comments: “An increasing number of people are relying on payday loans or short-term finance to get them through the month.
“The problem is particularly acute for those who are unemployed or in low paid work but it can also affect better-off families that find themselves facing severe cashflow problems for one reason or another.
“Payday loans might seem like the ideal quick fix but what was often intended as a one-off can become a long-term habit.”
Paul Urch explains that the interest rates on some payday loans could hit a punishing 4,214 per cent APR.
He comments further: “However, by fixing interest rates on our Freedom Loans at a maximum 26.8 per cent APR and spreading terms over a twelve month period we can help members manage their debt in ways better geared to their household budgets.”
Somerset Savings and Loans offers membership to anyone living or working in North Somerset, Bath & North East Somerset or the County of Somerset.
Members can then access Freedom Loans of between £500 and £1,500 with simple terms and at reasonable rates.
Somerset Savings and Loans is Regulated by the Financial Conduct Authority.