Holyrood urges debt families not to use payday loans

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PEOPLE who have been hit by festive season debts have been urged by the Scottish Government to consider the use of credit unions.

Holyrood says cash-strapped families who overspent at Christmas and the New Year should use local credit unions as an ethical and affordable alternative to taking out payday loans. The advice is part of the Scottish Government’s Helping Hand with Debt campaign.

Enterprise minister Fergus Ewing commented: “There are alternatives and more affordable solutions to manage debt this year than payday loans with interest rates of up to 5,000 per cent.

“Credit unions can offer sensible, ethical help as well as loans at much more competitive rates with affordable repayments at fairer and more attractive terms.

“I would urge anyone to contact their local Citizens Advice Bureau for free, expert advice.”

The chief executive of the CAB in Scotland Margaret Lynch said: “It is important that people know help is available and that there is no shame in asking for it.

“Our main message is to avoid making the situation worse by taking out a payday loan.”

Frank McKillop of the Association of Credit Unions added; “Joining a credit union is a great way for people from all walks of life to get on top of their finances.”