Post-Christmas bills: Millions now owed to loan sharks

MORE than100,000 families turned to loan sharks over the festive period to ensure they had enough cash to cover the costs of presents and all the trimmings, a new report claims.
By The Newsroom
Published 15th Jan 2010, 10:22 BST
Updated 15th Jan 2010, 10:23 BST

Nearly 30m in illegal loans were taken during December to cover costs - which by the time they have been repaid will have almost tripled to 82m, the housing provider Circle Anglia said.

In the last three years, estimated loan shark activity has increased from 165,000 to more than 200,000 households a year, or 22 per cent. As the recession continues to bite, more families are being cut off from access to mainstream financial services and the loan sharks have moved in.

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But the report's authors say the quick fix solution comes with many dangers, and is far from brief – borrowers are stuck with an average interest rate of the equivalent of an APR worth 825%, and take over a year to pay loans back.

Experts have warned borrowers not to be tricked into using loan sharks, as much more is at stake than just higher repayments. If you find yourself strapped for cash or struggling with unmanageable debt, there is help at hand.

In our video, Leanne Baxter, Head of Sustainable Communities at Circle Anglia presents tips on how to get out of debt, and stay that way.