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Sheffield council launch new loan service


In a bid to combat the payday loan industry, the city of Sheffield will be offering a range of loans for poor residents.

The new loan provider will be called Sheffield Money and will be regulated by the financial services industry and backed by the city council. It has been created to combat the short term, high interest payday loan companies such as Provident Financial, Brighthouse and Wonga. It will offer loans in as little as 15 minutes from its city centre shop, and will also have a phone service.

Sheffield Money claims that it will help poor residents save £20 million in one year alone. It is confident that around 25,000 residents, particularly tenants, people on benefits and the unemployed, will take out loans from Sheffield Money over the next year. It also believes the move could work around the rest of the UK, helping even more poor people.

As Sheffield City Council leader Julie Dore said
“Payday and doorstep lenders have been ripping off and exploiting some of the most vulnerable people in our city, preying on their need for available credit and charging extortionate interest rates. Sheffield needs to be able to offer these people a fairer option which will stop them being forced to go to these notorious lenders”.

The service is for people who have a history of poor credit, and will offer interest rates between 49.9% and 89.9%. Applicants with better credit histories will be redirected to certain credit unions where the interests rates start at 12%.

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