For those who find it hard to get mainstream credit such as a bank loan, fair and affordable lenders like credit unions could provide a lifeline.
Responsible, affordable credit could help you to pay for unexpected costs that may come up and make essential purchases that are otherwise unaffordable upfront. A lack of access to credit can see people going without essential appliances such as a washing machine, or not being able to afford school uniforms.
Credit unions offer a wide range of financial products and services to help customers from all walks of life.
All credit unions offer savings accounts and loans. Many offer additional products such as junior savings accounts, Christmas savings accounts, prepaid debit cards, insurance products, cash ISAs and in some cases even mortgages.
There’s no “one size fits all” rule in credit unions, and there is great diversity in the sort of services that different credit unions offer in order to meet the different range of customer needs.
To find your local credit union visit www.findyourcreditunion.co.uk
Responsible finance providers offer simple, affordable loans when the bank can’t help. They have created a directory of responsible finance providers who provide finance that is fair and also offer support and advice. To see which responsible finance providers operate where you live visit www.findingfinance.org.uk
Fair for you
Fair for You is an alternative to high cost weekly payment stores:
You buy now directly from their suppliers by taking out a loan from them, and then pay later in flexible instalments. You pay what you can afford, when you can afford it and the faster you pay it off, the less you pay.
Fair for You is a not for profit alternative to high cost credit, offering flexible, affordable and ethical loans for household items through their online high-street. For more information visit www.fairforyou.co.uk
Stop loan sharks
Loan sharks are illegal lenders, often targeting low income and desperate families. Borrowing from them is never a good idea – even if you feel you have no other options. The money you borrow will come at a very high price. One person who borrowed £500 ended up repaying £88,000.
How to spot a loan shark
A loan shark might:
- give little or no paperwork
- refuse to give information, such as how much you owe
- hold items such as passports and bank cards as security
- increase the debt or add extra charges at any time
- refuse to allow you to repay your debt in full
- threaten and intimidate.
Anyone lending money should have the correct permission from the Financial Conduct Authority (FCA). Legal lenders have to comply with strict guidance and ensure they are dealing with customers fairly, using proper paperwork and legal collection methods.
You can check if a company is authorised to lend money by visiting www.loansmart.org.uk
If you are aware of loans sharks operating in your area and want to get advice and support 24/7, call the Stop Loan Sharks helpline on 0300 555 222.
Help and support
If you're still unsure, contact our income management team