Residents urged not to turn to payday lenders

The survey, conducted by The Money Advice Service, found that 40 per cent of those asked owe between £200 and £250 and 13 per cent owe more than £250 with the average debt carried over from last Christmas £183.

Wigan Council is warning residents against using a payday lender or loan shark and is urging residents to apply for a cheaper loan through a Credit Union – to avoid spiralling further into debt.

One woman, from Leigh, who cannot be named, went to her credit union, Unify, after she was struggling to repay a payday lender the £300 she had borrowed.

Unify repaid the debt and spread the new loan over an affordable period.

Clr Terry Halliwell, cabinet member for customer transformation at Wigan Council, said: “Payday lenders and loan sharks may seem like the easy option but what a lot of people don’t realise is the amount of interest they charge.

“Credit Unions offer a cheaper and safer alternative to help residents borrow sensibly.

“We also offer money management advice and personal budgeting courses to help people manage their money more effectively.

“If you’re struggling to make ends meet visit your local Citzen’s Advice Bureau or speak to your local Credit Union for a low cost loan.”

For more information about the support available visit wigan.gov.uk/moneyadvice or to report a loan shark call 0300 555 2222 or text LOAN SHARK and the lender’s details to 60003.

Angela Fishwick, chief executive of Unify Credit Union, said: “Residents should take extra care when borrowing money to pay for the cost of Christmas.

“Always ask how much the repayments are, and what is the total cost of credit and only borrow from licensed lenders.

“Don't be tempted to borrow from doorstep lenders charging an average of 400% APR or from payday lenders charging in excess of 1,000% APR.

“If you are struggling to repay your high cost loan, get help locally from Citizens Advice or talk to Unify.”