PUTTING your savings to work in an ethical alternative to High Street banks can make a real difference to local lives, says Boom Credit Union.
Based in Sheerwater, the local credit union for Surrey is highlighting that more than 40 per cent of young people turn to payday lenders for high interest loans ranging from 440% to more than 1000% APR. It’s calling on local people to help get thousands out of debt and avoid the clutches of loan sharks and exploitative credit lenders.
“You might ask why do people borrow what they can’t afford to pay back? Unfortunately life for some people isn’t that simple. The washing machine suddenly breaks, or the car needs urgent repairs, and then payday loans and other high interest lenders seem an attractive proposition at a time when they are desperate for money,” said Catherine Illingworth from the credit union’s Business Growth team.
Personal debt is now said to be at a 10-year high, with one in six adults admitting to financial worries. January can be a bleak month financially – whether it’s increased rail fares or the arrival of credit card bills laden with festive spending, many are feeling the pinch. For some, it can be too much. This is why Boom Credit Union wants to help more people get access to an ethical bank account and a cheaper fairer loan.
The not-for-profit organisation has the support of Woking Borough Council, who awarded it £12,400 as part of the latest Community Grants Scheme, and has provided rent free accommodation for the office in Dartmouth Avenue for several years.
“They provide a source of affordable loans to those residents who may have difficulty in accessing them or would otherwise be obliged to use high cost finance from payday lenders and or other high interest lenders,” said Cllr Ayesha Azad, portfolio holder for grants to voluntary and community organisations.
“In addition they also help residents to save and play an important role in advising residents responsibly, thus serving a huge community benefit.”
Boom has seen a significant increase in demand, a 120% increase in ethical loans for the second quarter of 2017 compared to the same period for 2016. But without the support of the public and local businesses in terms of new savings invested, they will have to stop lending.
“It is brilliant that more people are learning about Boom. However, without savings from residents or from local business looking for an ethical investment, we will not be able to continue the good work in our communities,” said Mrs Illingworth.
“We are a not-for-profit organisation and the public can be confident that their savings will make a difference and are protected by the Financial Services compensation scheme like any bank.”
The credit union was able to arrange a £4,000 load for a Woking student nurse so she could pay off high interest debts: “We saved her £20 a month on her monthly payments and lots more in interest and bank charges.”
In another case study, a woman from Woking was loaned £3,200 to pay off existing high interest debts, and for a contribution towards her daughter’s wedding. She now has one payment to Boom, saving her £95 per month in overdraft charges and expensive catalogue repayments. In addition, thanks to Boom’s policy of getting people to save alongside loans, at the end of her loan period she will have built up a savings pot of £840.
To find out more about saving with the credit union, visit www.boomcu.com or call 01483 917958.