Alternatives to payday loans needed – Beggs

Published on Wednesday 4 April 2012 10:33

A LOCAL MLA has urged people to look at alternatives to payday loans after it emerged some companies are lending with little or no background checks taking place.

UUP Assemblyman Roy Beggs Junior made the comments after a recent report found some companies are flouting requirements to assess the creditworthiness of all applicants before granting any loan.

“In today’s tough economic times some payday loan companies are cashing in on the vulnerable in our society by offering these high interest loans, which are promoted as handy solutions to short-term cash flow problems,” Mr Beggs said. “Typical rates of interest quoted can be as high as 4000 percent.

“Problems arise when the borrower is unable to repay the loan and it rolls over into the next month, incurring more charges, or when a second loan is taken out with another company to repay the first.

“I would encourage people to look to look at alternative legitimate sources of funding such as credit unions which can offer a real alternative to the extortionate rates promoted by payday loan companies.”

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