MP warns against high-interest loans

A Scottish MP has warned those who have lost money due to the collapse of Christmas hamper company Farepak to beware of high-interest loans being offered in the area.

Farepak – a vouchers scheme which people contributed to during the year to receive goods for the festive period – recently collapsed, leaving thousands of people across the UK out of pocket.

And local MP Michael Moore said he was “very alarmed” at certain loan companies taking advantage of affected residents and offering loans at up to 177 per cent interest, reports Berwickshire Today.

“In some cases, a number of people living in the same street have lost hundreds of pounds,” he told the paper.

“It would be very grim for people to be drawn into these loans with these ridiculous amounts of interest.”

Those looking to compare loans are advised to carefully consider how much they can afford and look for the best rate depending on their circumstances, according to The Motley Fool.

The financial website also warns that some lenders aim to “fleece” borrowers who may be unaware of how interest or annual percentage rates are calculated.

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