Margaret McCulloch MSP has joined forces with East Kilbride Credit Union to warn locals against taking action which could leave them paying off Christmas debt until the next festive season.
With finances tight, many fear they will not have enough cash to see them through to January’s pay day and as a result might be tempted to take out a ‘payday loan’. With sky-high interest rates it will only leave you feeling the pinch for months to come.
Members of the Credit Union can borrow smaller amounts of money over flexible periods of time that a high street bank would not consider and the interest rates are substantially lower than payday loans.
Margaret McCulloch MSP said: “Many people overspend during the festive season and are left worried about how they are going to make ends meet until pay day.
“Those who are members of the credit union can borrow at much better rates than they might get elsewhere, making it a much better option if you plan to borrow money. Those who are not members can also benefit from the advice they offer on how to better prepare for next year by becoming a member and a regular saver.
“If you do find yourself in debt this year, you are not alone. Ask for help and plan ahead so it doesn’t happen again next year.”
John Lange, manager of EKCU, added: “Payday loans are the worst possible way to finance any purchase especially Christmas as the temptation exists to roll repayment forward to the next month.
“East Kilbride Credit Union offers secure loans to members from 6 per cent APR if you have the appropriate savings. The maximum interest rate Credit Unions can charge is restricted by law and all loans must be less than 27 per cent APR.
“Members should always consider using their local credit union to borrow because we will lend smaller amounts that banks are not interested in.
“We also encourage members to save regularly because that is how we ensure that loans are available. Savings are effectively recycled as loans to other members in the local community.
“A few pounds saved each week would make next Christmas so much easier and members have often said that saving with the credit union is the best decision they ever made to help them finance regular purchases like holidays and Christmas.
“Loans and savings are also insured free of charge to members and this is a huge benefit that people often overlook.”