Charities warn to steer clear of loan sharks
Local volunteers with the St Vincent De Paul Society (SVP) are warning that high interest moneylenders are ‘as active as ever’ in communities across Galway.
The society is urging anyone who is struggling – particularly with fuel and food this Christmas – to avoid getting into debt and reach out to the organisation if they need help.
“Using moneylenders is a practice SVP advises people to avoid if they can,” remarked a spokesman for the charity in Galway.
“Our members in Galway say that moneylenders are as active as ever. However, there are fewer families being helped by SVP who are using moneylenders.”
The charity recommends that families check out the Personal Micro-Credit (PMC) scheme which was specifically designed as an alternative to moneylenders and is offered to social welfare recipients and low-income households.
Also known as ‘It Makes Sense’ loans, they allow people to repay through the Household Budget Scheme administered by An Post or by a direct debit, building up their credit rating and giving access to more affordable credit.
If somebody takes out a €500 “It Makes Sense” loan, repaid over six months with an APR of 12.68% they will be charged interest of €15.84.
The same loan from a licensed moneylender at a rate of 187.2% APR – a very common rate for so-called ‘doorstep loans’ - will command €150 in interest.
See full story in this week’s Connacht Tribune.
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