Learn smart ways to borrow and save
30th March 2015
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.
Sharon Smith of DWDT’s Money Matters team warns people to avoid rogue lenders at all costs and to approach a Credit Union instead.
DWDT urges people never to use doorstep lenders or companies charging exorbitant interest rates which present a high risk of spiralling debt.
Payday loan companies, for example, have previously been scrutinised by the Office of Fair Trading which 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 when seeking 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 and Doncaster as well as several collection points for paying in money at places such as Children’s Centres,” she pointed out.
“There’s no problem 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.
Money Matters staff attend dozens of Doncaster groups to advise people about issues including spending, saving and budgeting, low-cost credit, debt and benefits. Any group interested in hosting a money advice session can get in touch for details.
For more details, visit DWDT at The Terrace on Castle Avenue, Conisbrough, telephone 01709 866466 or email: email@example.com.
Did you know? There are more than 40,000 Credit Unions operating in scores of countries around the world.