People struggling to make ends meet should seek advice before borrowing from quick loan organisations
Northampton Labour Raise Concerns over Danger of Short Term Loans.
Northampton Labour has consistently raised concerns over the ever-increasing number of quick loan businesses that have not only grown but blossomed in the last two years.
They are businesses that are constantly being advertised especially on day time television promising a quick and positive answer to applications for a short-term loan.
It is of course all legal but the dangers are now becoming even more pronounced in what is forecast to be the economy that is about to enter a triple-dip recession and the upsurge in the number of families who need a short-term loan just to make ends meet.
It is a why Labour have Listened to Northampton and why they put the following motion to the full Borough Council asking the Council to promote the Northampton Credit Union.
(iii) Councillor Wire DL to propose and Councillor Capstick to second:
“This Council notes that in April 2012 it approved a motion to promote Northampton Credit Union and how to apply. This Council believes that the terms of this motion have not been sufficient.
With the Government bringing in many changes this year to benefits the need to promote credible and reputable credit unions is more urgent than ever.
Over 2000 working families in Northampton will soon lose on average £468 per year in support for childcare costs following the Government’s plans to reduce the childcare element of the Working Tax Credit.
Many residents have fallen prey to payday loan companies and loan sharks, which charge exorbitant interest rates. Many households now face even more hardship.
This Council therefore asks the Cabinet to take urgent measures to promote such credit unions and point out the huge risks of payday loan companies and loan sharks. This message needs to be conveyed directly to our residents.”
Why are Labour promoting the Northampton Credit Union?
Put in simple economic terms if someone borrows £100 from the Northampton Credit Union over 12 months they payback £106.50 compared to a well-known and much publicised loan company where if you borrow £100 the repayment will be £106.54 the difference between the two being that the £6.54 is due after a single day.
The problem of people who in desperation have turned to loan companies as part of the solution to their problem and have then found themselves in an ever-deepening debt crisis and in some cases eventually having to resort to ‘loan sharks’ with tragic results has been well publicised.
It is because Labour not only take the economic consequences of short-term loans seriously but also the social impact of the damage caused that we would urge anyone who needs help to seek advice from the Northampton Credit Union or other reputable organisations such as the Citizens Advice Bureau before taking out a short-term loan.
Northampton Labour are pleased that following their lead the Conservatives and Liberal Democrats voted to support the motion and agreed to publicise and support the Credit Union.