Consumers who cannot prove their incomes can still obtain credit by taking out home loans
, it has been claimed.
People with “uncertain incomes” are often “constrained” in their choice of credit products, according to Provident Financial.
Spokesman David Stevenson claimed that home credit is particularly suitable for people with lower incomes.
He said that borrowers are not penalised for missing repayments and that most people use them either as a main source of credit or to supplement other loans.
According to Mr Stevenson, the amounts that people borrow “are very small” and typically fall below the minimum amount that a bank would be prepared to lend.
For people with poor credit histories that are worried about defaults appearing on their record, he stated: “There is no default interest or default charges – if a customer misses a payment there is no extra cost, a payment is simply added to the end.”
In related news, the government laid out plans to roll out a free financial advice service across the country earlier this year.
Accompanied by funding for the setting up of new credit unions, the service is aimed particularly at people that may otherwise end up being exploited by loan sharks.
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