Galway families urged to beware of Christmas loan sharks

A local TD has warned that hundreds of struggling Galway families will turn to moneylenders to get over Christmas — and end up even worse in debt.

Independent TD Noel Grealish pinpointed one lender who is advertising €500 loans – with a shocking €280 interest….and it’s all perfectly legal.

But the same loan with the Credit Union would see an interest payment of just over €25 over twelve months – a fraction of the cost.

“What some people may not fully realise is they will be paying through the nose for such a loan — it will end up costing them a total of €780 in interest and repayments over the following year,” he said.

“That’s an incredible €280 extra to pay on a loan of €500 … they will be paying back €15 a week until the latter part of next year, and more than a fiver a week of that is interest.

“This finance company and others like it will be charging a whopping interest rate of 157% APR, compared with the credit unions’ 9.9% APR.

“It’s all perfectly legal, but my concern is that vulnerable people struggling to make ends meet will see this as an attractive option to see them over the Christmas, without realising how much it will cost them,” he added.

Deputy Grealish has called for an increase in funding for the Money Advice and Budgeting Service (MABS) which offers free support to people facing money difficulties, and he also urged the speedy rollout of a plan to make small loans available to those who can’t get credit.

See full story in this week’s Connacht Tribune.