A Nottingham group aiming to turn people away from illegal loan sharks and payday lenders says it has saved clients more than £1 million in a year.
The Nottingham Credit Union (NCU) is a not-for-profit alternative offering substantially lower interest rates to people with poor credit ratings.
General Manager Ella Ferris said: “The main aim of the company is to help people that are excluded from financial services and stop people from using loan sharks and door step lenders.
“We want people to know that there is an alternative, just because you have a poor credit rating it doesn’t mean you have to pay a lot to borrow.”
The union lent £1.6 million to the Nottingham public last year and believes it has saved clients more than £1 million in interest when compared to its closest competitor.
Ella added: “That’s quite a conservative estimate, if you look at loan sharks who charge 300 per cent APR compared to our 40 per cent rate the figure would be much higher.”
The union has been around since 1992 and is enjoying a record high number of customers with a 28 per cent increase in the last quarter.
The rise is in part to the Nottingham City Council‘s campaign to discourage people from borrowing money from pay day lenders.
Measures have included a ban on payday lender websites being accessible from council computers, including in libraries, and a ban on payday adverts appearing on council-owned platforms.
Every loan is a loan lost to unethical lenders
The group has also revamped its website to make the process of applying for a loan easier and is running an advertising campaign to increase awareness.
Union board member, and Nottingham City Councillor Sam Webster, said: “A healthy, successful Credit Union is important for Nottingham residents. Credit Unions often offer much lower interest rates than pay-day and doorstep lenders.
“Deterring people from resorting to loan sharks is important. Every loan approved by Nottingham Credit Union is a loan lost to unethical, high interest rate lenders.”
