Over two million households are taking out loans from door-to-door salesmen…
Over two million households are taking out loans from door-to-door salesmen at rates of up to 200 per cent according to a Save the Children report.
Figures show that millions of families are being targeted by these companies, with as many as 2.3 million using these loans – many to pay for basic living costs, like energy bills.
Mainstream banks and building societies rarely lend to people with poor credit histories, and with tighter controls now being enforced borrowers are having to seek alternative means.
Save the Children’s Jason Strelitz says: “Doorstep lenders exploit poor families’ inability to get credit from more mainstream lenders, and they cover their risk in lending to the less well off by charging punitive interest rates.”
According to the report, almost 165,000 of the poorest families in the UK are forced to borrow from illegal lenders or loan sharks, with loans being repaid on average three times over – £285 paid back for every £100 borrowed.
Chiltern’s Joanne Gill says: “Many people use these facilities as they feel they have no other option other than to borrow their way from debt. This is rarely the best option in these circumstances, and usually means that the borrower will spend longer in debt than they need to.
“A better option, than expensive door-to-door salesmen, is to seek impartial debt advice as there are other options available, like debt management, which mean that they won’t have to borrow more money.”
