Christmas is over and January’s payday feels closer to 2021 than it does the end of the month. With funds running low after our festive splurges, the temptation is there to go on the hunt for a quick fix in order to bolster ailing bank balances. Unfortunately, this temptation often comes in the form of payday lenders and their promises of ‘quick and easy cash’ with no catches or concerns. Terrifyingly high interest repayments are, however, a pretty nasty catch.

Thankfully there has been a real crackdown in recent years on lenders such as Piggy Bank loans, Wonga and QuikQuid. In fact, Piggy Bank loans has become the latest short-term creditor to disappear after collapsing into administration shortly before Christmas. Six months earlier they had been forced to stop trading after the Financial Conduct Authority raised concerns about poor affordability checks. It meant Piggy Bank loans was forced to carry out an assessment to make sure it was lending money to customers who could afford to pay back their loans.

New customers were being offered ‘Piggy loans’ of up to £1,000 for up to five months, paying an interest rate equal to an annual percentage rate of between 1,255% and 1,698%. Following the assessment, the firm ceased to carry on lending. When we see these kind of figures at Pennine Community Credit Union, it makes our eyes water. Loans should be used to help give people a leg up, not plunge them into financial chaos.

Now, of course we’re going to say PCCU is a credible alternative to some of these unscrupulous payday lenders; you’re on our blog after all. But we are more than happy to back this claim up with a few facts.

1. High interest rates? Not here. Our interest rates are set as low as they can possibly be. As PCCU is a not-for-profit organisation, we do not need to charge excessive rates in order to bring more money in. Our rates are between 1% and 3% interest per month on the decreasing balance (12.7% APR – 42.6% APR) – so the interest is always reducing.

2. When it comes to payday loans, costs can quickly spiral out of control if they are not repaid on time or in full. PCCU does not want to catch anybody out; the exact opposite in fact. We want to help people get back on sounder financial footing. That’s why we ensure account holders don’t borrow any more than they can comfortably pay back, and we always ensure manageable repayment plans are put in place.

3. When people think about Piggy Bank loans they think ‘quick turnaround’. Well, we’re no slouches here at PCCU and are more than confident our loan-decision times are up there with the quickest. Once a person provides us with all the information we require, a decision will be made within two days; more often than not the very next day.

4. The ‘Save as you Borrow’ method is unique to credit unions and offers account holders the kind of safety net payday lenders are just not interested in. How it works is that as you make repayments, a small amount is taken out to build up a savings pot. This helps protect you from any expected expenses that may arise in the future, reducing your need to borrow.

5. Last but by no means least, PCCU staff are among the most professional and hard-working around. Our dedicated team is always on hand to answer any questions you may have regarding our loans, whether that’s over the phone or in person. Give us a call on 01282 691333 to find out more.