Low interest loans – debt consolidation for the poor

People on low incomes become deeply engrained in debt when they have to borrow and use credit to make ends meet.

It is estimated that low-income families tot up at least £330 million in borrowed money per year. Once interest has been added, this figure is elevated to £470 million per year.

For those families who are not in a financial position to take advantage of low interest consolidation loans, their only option is to turn to loan sharks or to take out high interest loans. However, these do not provide them with any debt help, as monthly repayments can become too much to cope with and families could sink even further into the depths of despair.

As a result, the Government is being encouraged to work alongside banks to introduce low-interest loans for their poorest UK consumers.

Funds would come from the private sector and would help over three million people who survive on low-incomes. It would save many families a lot of heartache and expense as they would be protected from loan sharks. It would also allow banks to fulfill a social responsibility to their customers from the less affluent end of the financial market.

Low-interest loans would allow some of the poorest families in Britain to have the same financial opportunities that so many people in the world take for granted. For many, it could be used for debt consolidation in conjunction with debt counselling which would help them on the road to a more financially secure future with a proper savings regime.