Many of us will now be planning our Christmas shopping and may need a bit of help to spread the cost of the extra spending over the coming year. Fine, as long as we can afford to make the repayments.
At this time of year, the doorstep credit agents are working flat out to meet the demand for small loans. Their services are popular, but as the Competition Commission recently pointed out, the total cost of borrowing from them can be very high indeed. Here are some examples quoted by two well-known doorstep lenders:
Loan £300 over 55 weeks Doorstep lender 1 Weekly repayment £9.00
Total to repay £495
Interest rate 177% APR
Loan £300 over 55 weeks Doorstep lender 2 Weekly repayment £11.25
Total to repay £618
Interest rate 365% APR
At Christmas especially, every penny saved counts, and so it pays to look around for the best possible deal. One option could be your local credit union. Local people have set up credit unions to bring affordable saving and borrowing within the reach of everyone. They are friendly, not-for-profit and specialise in making small loans. There are three in Hull: HEYCU (Tel 318518), Hull East of the River CU (Tel 712326) and Hull Northern CU (Tel. 851808).
To borrow from a credit union you must become a member and be able to show that you can repay the loan. Credit unions let you save alongside your loan repayment and often accept benefit payments, deductions from pay or bank standing orders, as well as cash at local contact points.
By way of example, with a HEYCU Freedom Loan of £300 over 55 weeks you'd repay £341 (interest rate 26.8% APR), a saving of £154 on doorstep lender 1. That's an extra £3 a week to save or put by for next Christmas.
