Bad Credit Lenders to Open in West Midlands
The National Housing Federation (NHF) unveiled a new lender last month with the aim of giving borrowers who had bad credit or were on low income access to personal loans without resorting to loan sharks.
My Home Finance has been backed by the Government and will offer payday loans and bad credit loans to the financially excluded, said the NHF. Potential borrowers will have a face-to-face interview with a consultant to borrow low sums, such as £500, in order to pay for household necessities like kitchen appliances, furniture or school uniforms.
The unsecured personal loans will be repaid weekly at an interest rate of 29.9 per cent. Although this rate is far in excess of the best value deals for normal unsecured personal loans, the NHF stressed that it is considerably lower than the 200 per cent charged by doorstep lenders or the sky-high rates of 2,000 per cent-plus imposed by loan sharks.
The group also plans to give people debt advice and assistance with opening a bank account.
My Home Finance will operate in partnership with the Department for Work and Pensions, the Royal Bank of Scotland, 26 housing associations and the Wates Foundation. This will make it one of the largest not-for-profit financial services groups in England.
Initially 10 branches are planned across the high-unemployment area of the West Midlands by the end of next month. East Lancashire Moneyline will be directly running the branches, thanks to its status as one of the leading affordable credit providers in Britain.
My Home Finance branches are to be located in shopping centres and on high streets. If successful, more will be opened across England over the next 10 years.