Brits using high-interest loans

Thu, 30 Jul 2009

The credit crunch has forced some Brits desperate for money to use high-interest lenders instead of secured personal loans from reputable companies.

According to one industry figure, those on a low-income are snubbing secured loans because lending criteria is too tight, instead opting to deal with 'adverse credit' providers which charge high levels of interest .

Ian Boden-Smyth, a spokesperson for the UK Insolvency Helpline, made the comments in response to a campaign launched to get the Office of Fair Trading to investigate high-interest lenders.

Mr Boden-Smyth advised: "Behind the scenes if you do look, if you do go to your local credit union, if you do go to your local advice bureau or organisations like ourselves you will find that there are lots of people who are willing to offer normal rates under the financial inclusion bill."

Recent research by Moneyfacts found that Barclays, the AA, Direct Line, Goldfish and Virgin Money among others have stopped offering unsecured personal loans as they are considered risky products.
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