272% interest doorstep loans for 1,600 council house tenants
WOULD you borrow money from someone who just turned up on your doorstep?
That's what more than 1,600 council tenants in the city have done – and some are struggling to pay back debts with interest rates of up to 272 per cent.
In a representative survey of Gloucester City Homes tenants, 37 per cent admitted to taking loans from loan sharks knocking on their doors.
That means 1,665 of GCH's 4,500 tenants are in debt to lenders who call on them unsolicited.
Traditional Shave, Facial Treatment, Whisky and a Shoe Shine -...View details
Gents, enjoy a traditional shave, facial treatment, glass of whisky and a shoeshine for £31
Terms: Early and later appointments available upon request.
Contact: 01242 504887
Valid until: Tuesday, December 31 2013
The figures come amid continuing controversy surrounding payday loan companies which sometimes charge up to 5,853 per cent APR.
GCH chief executive Ashley Green said: "It is a problem, and it is concerning that our tenants are using doorstep lenders, some with interest rates of 272 per cent. Anyone in financial difficulty should speak to a reputable organisation for advice."
An APR of 272 per cent would mean repaying almost £3,000 on a £1,000 loan taken out over one year.
Mr Green added that 40 per cent of those asked borrowed money from a bank.
Sarah Churchill, a mum-of-one from Kingsway, said: "I'm not really surprised to hear that figure to be honest, and I would expect it to rise in the next year too.
"People on benefits are the most vulnerable in our society and the Government has squeezed so much.
"I haven't been in the position where I have had to consider a quick loan company luckily, but if I was then yes, I probably would turn to one. It is really sad that this is happening in our society and these companies are making so much money out of vulnerable people."
Liam Kelch, chairman of Matson and Robinswood residents group, said: "I deal with people all the time who use pay day and doorstep loans and people are getting into a lot of debt.
"Where I'm from, in Ireland, we don't have this problem as much as we have more credit unions."
Gary Mills, debt specialist at GL Communities, said: "There are many people who need this type of facility because it is quick and painless initially, but they are the clever ones who can pay it back. It is when other things hit people that they begin to struggle, when other costs come in, bills etc.
"I advise people to go to the Gloucestershire Credit Union whose APR is 26.82 per cent. There are other options."
If anyone has concerns about high cost loans or has financial worries, they are advised to call Gloucester City Homes on 0800 408 2000.