Forget Wonga or high street lenders to get cash quick. Credit unions are offering an easy alternative for when you’re skint.
The unions are setting up shop across Hackney to challenge high-interest loan companies, trading on streets up and down the borough.
Hoping for 500 Hackney members
The London Community Credit Union, with links to the Church of England, has been expanding at record speed as residents search for cheap sources of finance to help with home improvements.
Organisers hope that 500 Hackney residents will become members of the union by the end of the year.
A new member, Janice Brunsdon, said: “I didn’t know much about unions until recently. I wanted to join one because I believe they will lend to people who the banks won’t and they are ethical.”
The idea is part of a drive by the Church to force high street lenders out of business. The Archbishop of Canterbury, Justin Welby, slammed companies like Wonga last year.
Cheaper than private loans
Borrowing from a credit union is a bargain compared to a private loan. A loan of £100 for a month from the LCCU would cost £6 in interest and fees, while the same loan from Wonga would cost £38.21 – over 500 per cent more.
Chris Baker, who runs the scheme, said: “Credit unions are vital in providing safe and ethical alternatives to payday loan companies for those on very low or precarious incomes, and who might also be drawn to easy gambling or petty crime as a way of trying to get money to live.”
Those wishing to join can invest as little as £10 a month before qualifying for low cost loans from the savings. Members must be 18 or above.
Councillor Sophie Cameron praised the scheme and said: “I think this is a fantastic idea. Companies that lend money at extortionate rates of interest are a real problem and I hope this initiative will stop their growth.”
(Featured image: Flickr/Jaggers)
