Millions of people in the UK are at the risk of falling prey to homeowner loan shark deals as they are unable to access loans or credit from regular banks, warns a new report.
The Housing Corporation is warning that almost three million people are unable to access mainstream banking and obtain the best rate on borrowing.
In a crisis, this leaves them vulnerable to loan sharks when they wish to compare loans, and unable to carry out day to day banking, warned John Rouse, Housing Corporation chief executive, on BBC Radio Four’s Today Programme.
“It means the things we take for granted, being able to use direct debit, being able to have a wage paid into a bank account, being able to use a cheque book, being able to take out a small loan and pay it back over a period of time at a reasonable interest rate, they can’t do any of those things,” he said.
The best rate available from a loan shark when borrowers compare loans is between 100 and 400 per cent, he added.
Research carried out by the group found that one in 12 people said they had suffered from financial exclusion, with one in five saying that they had turned to a doorstep lender as a result.
Seven per cent who had found themselves financially excluded said that they had lost their homes.
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