Loans from Wandsworth council and credit union

The local authorities in the Wandsworth borough are providing low interest loans of up to £7,500 in partnership with not-for-profit credit unions. The scheme is used for providing money for paying bills such as white goods, clothing, rent or fuel costs to applicants with a low credit rating as well as the vulnerable.

The council and the credit union are providing loans in an effort to stop residents from using payday lenders or other high priced companies. They are also trying to get people with poor credit into the mainstream banking sector so not only can they receive cash at a low interest rate, they can also access other financial service programmes so they can get back on track. This means that at the same time as being found qualified for a loan, the borrower will need to join the credit union.

The loans can be used for paying bills that the borrower needs help with. Some people use it to repair their car, others use the cash for paying for their bills such as heating. The Wandsworth council will even encourage borrowers to use the low interest rate loans from the credit union to consolidate other debts they may have. The advice is to only use the cash as a last resort, in a crisis situation.

The loan scheme can also be combined with welfare from the council. All of these funds are combined for paying for expenses such as white goods, transportation, rent arrears or a deposit on a flt, and energy costs. The vouchers for welfare can be combined with the credit union services too.

The authorities are working with different credit unions on the scheme, including London Plus. Depending on the provider, the loans are combined with free budgeting advice, Christmas savings schemes, debt counselling, and the common bond programme. All of these services can help a family on a low income get back on track with expenses such as paying bills or the increasing cost of rent they are faced with.

The amount of money paid out to members in the Wandsworth borough will range from £50 to £7,500. The annual APR will be more affordable than other sources of funds, such as a payday lender or even credit card. The aim is to offer an affordable service.

The council will always advise against using this money for paying everyday bills such as electric or buying food, but some people may decide to use this scheme to fill a short term need in a crisis. Also, the process to repay the money is simplified as the repayments that need to be made the credit union can made directly from the borrower’s pay packet.

All of this aid is being provided in an effort to stop households from falling behind on their bills and feeling they need to turn to payday loan companies or loan sharks for the money they need. Also, many banks in Wandsworth are still hesitant to approve a borrower’s application, so people with a low credit can’t even talk seek help from those lender. So the Wandsworth is providing a strong alternative for families.

The credit unions are getting the vulnerable back into the mainstream lending market. So people are getting money at an affordable APR as well as access to other financial products. Members that sign up for the credit union will gain many other benefits from the company as well.