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Don’t get caught out this Christmas

October 19, 2018

It’s now coming up to Christmas, and inevitably, thoughts turn to how to pay for the upcoming festivities. Many people choose to use credit to cover some of these costs, and while this is best avoided if possible, if you do decided to borrow, it’s really important that you choose somewhere that isn’t going to lead you into problem debt.

Companies who enable you to make payments to an agent who collects from your home might seem attractive, as can companies offering short term “payday” loans. But the interest charges for these types of loans can be eye watering. For example, the typical interest rate (APR) for one leading home credit company is 272.2%! This means that £500 borrowed over a year would cost a whopping £410 in interest. For “payday loans”, things are even worse, with interest rates higher than 1,000% APR being very common. Because of the very high interest charges, these kinds of loans are best avoided.

It’s because of the high cost of some of these loans, that we have made sure that our residents have an alternative. Our partnership with London Plus Credit Union is long established, and all of our residents can join, regardless of where they live. London Plus offers affordable loans to residents (subject to underwriting and acceptance), with a maximum interest rate of 42.6% APR. This means that a £500 loan for a year would cost £107.59 in interest, a saving of over £300 compared to a “home credit” loan. They also encourage you to save, making it less likely that you will need to borrow again in the future, and saving while you pay off a loan can sometimes help you access a lower interest rate.

If you want to find out more about what London Plus can offer you, please call 020 7471 2620 or visit

Alternatively, if you wish to discuss money matters more generally, please call our Financial Inclusion Adviser, Jason Herbert on 020 8768 7925.


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