DWDT Money Matters - May 2013
29th May 2013
Many people need to borrow money at some time in their lives but there are smart ways to do it that won’t ruin your finances.
In this month’s money advice column, compiled by Doncaster West Development Trust (DWDT), Money Guide Sharon Smith warns against rogue lenders and highlights the benefits of credit unions.
DWDT urges people never to use doorstep lenders or companies charging exorbitant interest rates which present a high risk of spiralling debt.
Even the popular payday loans are currently under scrutiny by the Office of Fair Trading which has found evidence of "widespread irresponsible lending” and told firms to change their ways.
The legal and moral credentials of lenders therefore play a huge part in whether or not to borrow and Sharon strongly advises people to approach a credit union as a responsible lender offering affordable loans.
“Credit unions are still used mainly by people who can’t access mainstream banks but they charge reasonable interest rates and will lend small amounts,” she explained.
“They also put part of all loan repayments into a savings account so customers will have a small lump sum at the end of their repayment term.”
Unlike unscrupulous lenders who thrive on customers’ inability to pay, credit unions carry out an affordability calculation to ensure borrowers can meet the costs.
It’s impossible to overdraw on their current accounts and they can also pay people’s bills directly to help them manage their money.
According to Sharon, the availability of credit union outlets is not that widely known but there are plenty to be found across the borough.
“There are branches in the Dearne Valley, Doncaster and Barnsley as well as several collection points for paying in money at places such as Children’s Centres,” she pointed out.
“There’s no shame in getting credit sometimes but you need to do it sensibly and only borrow what you can pay back. Avoid doorstep lenders at all costs who target vulnerable people and tempt them into a cycle of borrowing,” added Sharon.
The DWDT Money Matters team runs free and informal advice sessions across the borough to provide facts and answer questions. For more details, visit DWDT at The Terrace on Castle Avenue, Conisbrough, telephone 01709 866466 or email: firstname.lastname@example.org.
South Yorkshire Credit Union has offices in Doncaster Waterdale, Stainforth, Denaby, Mexborough, Goldthorpe and Barnsley and can be contacted on 03030 300010.
Did you know? There are more than 40,000 credit unions operating in scores of countries around the world.