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Newsletter

Brits 'still using loan sharks'

By Sarah Engle, Mon 18 Jan 2010 - Published in Loans

Brits are continuing to put their financial health in danger by using loan sharks, it has been suggested.

Research published by Circle Anglia found that around 100,000 people in the UK have resorted to using a loan shark, borrowing a total of £29 million.

The report also pointed out that once high interest rates have been applied to these loans, borrowers will end up paying more than £82 million.

Commenting on the findings, Faisel Rahman, board member at campaign group Debt on our Doorstep, explained that banks have tightened up their lending criteria, which means that more people are ineligible for loans.

"As they pull out, lots of illegal money lenders are filling the gaps. The gaps are often just for basics like washing machines, cookers, and, in some cases, Christmas presents," he commented.

The expert also pointed out that people have safer alternatives to loan sharks, such as their local credit unions or community finance organisations, which tend to operate on a not-for-profit basis and can help people who do not have a bank account.