South shields MP Emma Lewell-Buck is warning cash-strapped South Tynesiders to avoid adding to their woes by taking out loans charging sky-high interest rates.
Mrs Lewell-Buck issued the warning while praising a fast-growing credit union.
Bridges Community Bank, in Sunderland Road in South Shields, has radically overhauled its business plan and offers a range of new products, providing affordable credit for people finding it difficult to access mainstream finance.
Mrs Lewell-Buck said: “It is fantastic news that an already-forward-thinking credit union like Bridges is making further enhancements to its offer.
“We are all aware of the extortionate rates that payday loan companies operate, but many people don’t realise that they have an affordable alternative on their doorstep in the form of Bridges Community Bank.
“It is very easy to give in to the temptations of an advert promising cash in 10 minutes’ time, but a lot of people don’t stop to consider the cost of borrowing in the long run.
“Bridges doesn’t promise money in minutes, but it can help people through difficult times in a responsible way.” Among the initiatives launched by Bridges are a loan product starting at just 7.5 per cent annual percentage rate, including secured loans at 5.1 per cent APR. Loan values of up to £10,000 are available, and there is free life cover for savings and loans.
Bank chairman Dave Fleetwood said: “Credit unions have long been viewed as the poor man’s bank, but this is a myth, and we want to change people’s perception.
“While we continue to provide smaller loans and serve those customers who struggle to access mainstream credit, we also want to attract a more diverse membership with new, more competitive products.
“This will not only help our business to become sustainable and move away from a reliance on grant funding, it will also ensure we can continue to support those most in need.
“To do this, we are hoping to attract new customers who are interested in just saving or a combination of saving and lending larger amounts.
“An interest-bearing account and competitive loan product will help us to achieve this.”
Bridges is the credit union with the largest membership in the North East, having more than 9,000 adult members and 1,400 junior ones, and it is hoping to continue to expand.
For further details, visit www.bridgescommunitybank.org.uk.