Mum's borrowing nightmare
Like many of us, Sarah was seeing her living costs rise. Feeling like she had little choice the mother of 1 applied for 2 loans but the amount she owed doubled in weeks to over £1000!
Services like Quick Quid, Wonga and Perfect Home can seem like great options at the time but can plunge customers into a nightmare of debt. Sarah had no idea about interest rates and APR or how to manage her £200 fortnightly benefits income. Living on £200 a fortnight Sarah could only afford bills, rent and food. Furniture was out of the question.
“I went to Wonga and QuickQuid to borrow money"
She borrowed £500 but unable to afford the repayments when other unexpected bills popped up Sarah's debt soon spiralled out of control to over £1,000.
"It was a nightmare every day - I thought I would lose everything"
Payday loans companies, cheque cashing shops or ‘rent to own’ companies can be very expensive. Credit Unions can often offer more competitive rates; details of which can be found at: http://www.moneyboxcu.org.uk but while Credit Unions can be more reasonable, budgeting is always a good idea first. Budgeting can help us to work out how much we can afford to borrow (i.e. are the repayments affordable). To do this, it is essential to budget. Completing a budget helps us to understand how much we can afford to pay towards debts and other outgoings.
“It was not good when I realised how much I owed. I had panic attacks and was getting depressed. I didn’t know what to do. I was constantly worried about it and thought I would be left with nothing. It was a nightmare every day.”
Sarah has since received budgeting training and has paid off her £1000 loan. If you have concerns about unaffordable debts, or would like help with budgeting, speak with one of our Tenancy Sustainment Advisors, we're here to help;