Ever since PCCU started to provide ethical savings accounts and affordable loans in Burnley and Pendle we have been aware that a number residents in the communities use doorstep or home credit lenders.
Doorstep loans are the largest high-cost credit market in the UK and are used by over 1.3 million customers.
PCCU has always looked to offer an affordable alternative, whilst also encouraging account holders to build savings alongside loan repayments that could help when unexpected expenses arise in the future.
The Money Advice Service has highlighted the cost involved in borrowing from home credit companies
Compared to other types of borrowing it is very expensive. For that reason it should be avoided if you have access to other forms of credit
Although the market is shrinking we understand there will always be doorstep lenders. However those who are currently using or considering using this form of credit should contact PCCU to see how a loan from PCCU compares.
At PCCU we carefully assess each applicants personal circumstance, we make loan decisions on affordability and tailor repayments to suit you. Account holders who have a loan at PCCU also benefit from free loan protection (subject to rules). As we are a co-operative you can be assured that loans are designed purely for the benefit of account holders and not external shareholders.
The Money Advice Service also identified credit unions as an alternative to doorstep lenders who have rates as high as 1,500% APR
Consider using a credit union. They act in the interests of their members. There’s also a cap on the amount of interest they can charge by law on their loans of 3% a month or 42.6% a year APR.
The Citizens Advice Service recently published their research into the doorstep lending sector. The interesting report can be found here.
PCCU used the figures identified in the report to compare the loans offered by two of the biggest lenders in the market with a loan from PCCU.