Fears that Struggling Parents May Turn to Illegal Payday Loan Lenders

Wed, 02 Sep 2009

Finance experts are predicting an increase in the number of parents turning to short term loan lenders as they struggle to cope with the costs of the start of the new school year. Despite decreased mortgage costs as a result of the numerous interest rate cuts from the Bank of England, the effects of the credit crunch remain troubling for parents across the country.

It is reported that as many as 50 per cent of all British parents are struggling to afford, though it seems likely that this figure may be somewhat misleading. Whatever the figure, it is feared that those who are unable to cope with the costs of the new school year may turn to illegal loan sharks to see them through the coming months.

With these parents already financially stretched to the limit, any attempts to secure a loan from a bank or personal loan provider would be likely to prove futile. It is feared that parents may therefore turn to illegal loan sharks to gain the necessary loans, though interest rates on such short term loans are infamously high. Parents are being urged to instead turn to credit unions – non-profit organisations designed to provide low cost loans to those in need.
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