Loan warning issued
27/10/08
People have been warned against using loan sharks and payday loan lenders to borrow money.
An article in the Scottish newspaper Daily Record is telling readers that low cost alternatives do exist for borrowing money and they should be researched before using a loan shark.
Payday loans offer instant money with no credit checks but there interest can be as high as 2,000 per cent so consumers should be aware of this before they commit to anything as they may not be able to pay the interest back.
Moneynet.com has also warned that logbook loans may seem good on one side as your car is used to secure the loan but again the interest rate to borrow the money can be well over 400 per cent.
Consumers are also told to avoid credit card cheques and cash advances as they have high interest rates as well.
Instead credit unions are the best possible means to borrow money at a low interest rate and they will also help with savings.
As Christmas approaches the need for money will increase and people are been advised to stay away from all the loan sharks and other high interest borrowing measures.
Spokesperson Seamus McAnee said that while paying back just £5 a week sounds attractive, the length of time it takes and the amount of interest could be extreme.
