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Secretary of State for Work and Pensions launches a new scheme which aims to give financially excluded people, on lower incomes, a fair-priced alternative to doorstep lenders and illegal loan sharks.
My Home Finance is being led by the National Housing Federation and supported by the Department for Work and Pensions, the Royal Bank of Scotland, 26 housing associations and Wates Giving. Iain Duncan Smith launched the scheme today at the National Housing Federation annual conference, at the ICC in Birmingham.
The scheme will provide loans charging a typical APR of 29.9%, comparing favourably to the rates charged by doorstep and pay-day lenders, which can range from 200% to 2,000%. Loans of around £500 will usually last for a year, but borrowers can select a shorter or longer term if preferred. My Home Finance will start with 10 branches across the West Midlands by the end of October, and will roll out to the rest of the UK from next April if successful, writing up to 150,000 loans to people on lower incomes over the next 10 years. The branches will be located in busy high streets and shopping centres, providing easy access to those who have previously been turned away by high street lenders.
Commenting on the launch of the Government’s ‘My Home Finance’ scheme, Joanna Elson OBE, chief executive of the Money Advice Trust, said:
“We welcome this addition to the consumer credit market. Any initiative aimed at widening the range of options for people whose options for credit are so limited should be commended, and we applaud the National Housing Federation for taking this important step.
“Providing credit to those who are assessed as ‘high risk’, however, is expensive, and the proposed rate of interest as of April next year of 49.9 per cent APR is far higher than the unsecured loan rates we are used to seeing in the branch windows of our high street banks. Consumers considering applying for a loan through the scheme therefore need to be absolutely sure they can afford the repayments.”
For more information on the scheme visit the National Housing Federation website.
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My Home Finance is being led by the National Housing Federation and supported by the Department for Work and Pensions, the Royal Bank of Scotland, 26 housing associations and Wates Giving. Iain Duncan Smith launched the scheme today at the National Housing Federation annual conference, at the ICC in Birmingham.
The scheme will provide loans charging a typical APR of 29.9%, comparing favourably to the rates charged by doorstep and pay-day lenders, which can range from 200% to 2,000%. Loans of around £500 will usually last for a year, but borrowers can select a shorter or longer term if preferred. My Home Finance will start with 10 branches across the West Midlands by the end of October, and will roll out to the rest of the UK from next April if successful, writing up to 150,000 loans to people on lower incomes over the next 10 years. The branches will be located in busy high streets and shopping centres, providing easy access to those who have previously been turned away by high street lenders.
Commenting on the launch of the Government’s ‘My Home Finance’ scheme, Joanna Elson OBE, chief executive of the Money Advice Trust, said:
“We welcome this addition to the consumer credit market. Any initiative aimed at widening the range of options for people whose options for credit are so limited should be commended, and we applaud the National Housing Federation for taking this important step.
“Providing credit to those who are assessed as ‘high risk’, however, is expensive, and the proposed rate of interest as of April next year of 49.9 per cent APR is far higher than the unsecured loan rates we are used to seeing in the branch windows of our high street banks. Consumers considering applying for a loan through the scheme therefore need to be absolutely sure they can afford the repayments.”
For more information on the scheme visit the National Housing Federation website.
More...
