CHRISTMAS may seem like a distant memory, but for some people it is still casting a large shadow over their lives.
According to the Debt Support Trust, payday loans increased by 400 per cent in the run-up to last Christmas and if these short-terms loans are not paid back on time that could result in additional debt.
More worryingly, the homelessness organisation Shelter – which says someone in the UK faces losing their home every two minutes – points out that one in seven of the population used payday loans to pay their rent or mortgage last year.
One Long Sutton resident knows only too well how traumatic the prospect of homelessness is and how people can be left feeling they have no one to turn to, other than loan sharks.
John, who does not wish to disclose his surname for fear of being stigmatised by the mental illness suffered by his wife Ann, says they were evicted from their last rented home as a result of Ann’s condition. “As far as they were concerned, she was unstable,” he says sadly.
As a result the couple were faced with homelessness unless they could find a deposit for their current home, difficult because John doesn’t work as he is Ann’s full-time carer. Luckily, a friend was willing to loan them the money they needed, interest free, and the couple moved into the property in October.
However, John realised he had a problem: he had to repay the loan in addition to his rent and the other costs of moving.
On top of that Christmas was approaching and John admits: “I was at my wits’ end because me and my wife don’t have family and so we had no one we could turn to.”
Fortunately, someone suggested approaching the Lincolnshire Credit Union, which has a LincUp base in Long Sutton’s Market House (Fridays, 10am to noon), and John was able to negotiate an affordable £1,000 loan.
He says: “It had got to a week before Christmas and because of our circumstances they arranged to get the money instantly into the bank. It solved my problem and if it wasn’t for them I don’t know what I would have done.”
He is now repaying the loan on reasonable terms and in additon John has been encouraged to save a small amount regularly to help pay off the loan earlier, which will reduce the debt as well as earning him interest on what he has saved.
As well as the Long Sutton base, LincUp operates out of St Paul’s Church in Spalding (Saturday, 10am to noon), run by volunteers from the Spalding churches. It was launched in response to what the Spalding Town Husbands and Citizens’ Advice Bureau saw as a growing need for financial help for people living in the area.
The Rev John Bennett said: “The Town Husbands had given grants to people in need for very many years, but the number of applicants had risen sharply.
“Working with the CAB, the Town Husbands agreed a means for ensuring that the money they have available is targeted towards those in greatest need.”
This meant some people would miss out unless there was an alternative and so Mr Bennett offered St Paul’s as a base for LincUp to provide affordable loans, based on the ability to pay rather than past credit history, and a safe and convenient method of saving.
Mr Bennett said: “There are many people for whom a relatively small amount of money can make a big difference. Many of those who approach the credit union at St Paul’s are looking for a loan, often to pay the deposit for rented accommodation.
“Banks are unwilling to lend a few hundred pounds, and while there are commercial companies who will lend this sort of sum they charge very high interest and, in the worst cases, people have found that they pay back thousands rather than hundreds.
“In the next few years, credit unions will be seen as a real alternative to mainstream banks because they are owned and controlled by their members.”
Contact LincUp on 01522 528886/845100 or call into the Spalding or Long Sutton bases for further information on its Christmas savings club, loans and general savings.