Christmas shopping left you stretched financially?

Concerned about money?

Manchester Credit Union came to Rochdale borough in August last year to offer low cost loans to people who open savings accounts at a fraction of the rates charged by payday loan companies and doorstep lenders.

508 people from across the borough have now set up an account and 340 people have taken out loans.

The loans are easy to repay because the credit unions cannot charge more than 26.8 per cent APR compared to companies like Wonga which can charge APRs running into the hundreds and thousands of per cent. Loans can be repaid weekly, fortnightly or monthly at amounts that are affordable and manageable for members based on their income and expenditure.

The credit union acts like a co-operative paying account holders a dividend on their savings and asking people to become members when they sign up.

Members can also pay in and withdraw money at a number of paypoints across the borough which are open late.

Zatoon Ahmed, Manchester Credit Union loan adviser working in Rochdale, said: “We’ve had a great response in Rochdale. Many of the people who come to us can’t get a loan from a bank and told us their only other option would have been a payday loan company. In some cases, people have come to us with debts from payday loan companies and we’ve been able to take on the debts and let them repay the loan at our significantly lower interest rates but sometimes people are already too far in debt for us to be able to help, so I’d advise them to come to us as soon as possible.”

In previous years, savers needed to have had an account with the credit union for a few months before they were eligible to apply for a loan, but now savers can open an account and as soon as they start saving and have made at least one payment into their savings account, they can apply for a loan. It can take as little as two weeks from opening an account to getting the loan if approved.