The boss of a credit union has warned of the dangers of payday loans companies - as more and more are landing in trouble with steep interest rates.
Seamus Grant of Erewash Credit Union, which serves 3,000 people across Amber Valley, said it is seeing a higher number of loan applications than usual this January as families are borrowing more cash to pay off ‘quick-fix’ loans companies.
He said: “When you think we give out our loans at a maximum interest rate of two per cent per month - some credit lenders offer a 4,200 per cent typical APR - but it can be even more.
“January used to be the quietest month but we are just constantly getting people in who have gotten out payday loans to cover Christmas and now need to take out a second loan from us to repay them.”
Mr Grant has urged people feeling the post Christmas pinch to figure out debt management plans, or to consider borrowing with the not-for-profit credit union before considering the payday lenders such as Wonga and The Money Shop.
He said one man, who recently came into the Ripley branch needed £3,000 to pay off a payday loan lender. He originally borrowed just £900.
Another customer was facing an 11,165 per cent interest rate on their loan as the rates had built up over a period of time.
To talk about managing debt, taking out a loan, or setting up a savings account with the Erewash Credit Union, call 01773 01773 841400.