Misery of 200 per cent interest on Santa loans

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LIMERICK City councillors have called for a  clampdown on legal moneylenders who are collecting up to 200 per cent in interest and causing misery to people who can least afford their exorbitant rates.

At last Monday’s Metropolitan District meeting of Limerick City and County Council, Cllr Joe Leddin (Lab) got full support from his colleagues for a motion calling on Finance Minister Paschal Donohue to introduce interest caps on lending bodies.

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“There are a number of these so-called credit companies distributing promotional leaflets around certain housing estates, offering instant approval for €100 to 500 regardless of the person’s circumstances.

“They charge up to 60 per cent in interest. They are, in my view, preying on low-income families who are looking for loans at this time of year.

“A €500 loan they can end up costing €700, taking into account interest rates. Yes, they are licensed but there is no cap on interest. In my view, these are one step above the moneylenders who have scourged people in this city for years”.

The City West councillor also called on the Minister to promote more affordable lending institutions such as the credit union, pointing out that such institutions are more likely to be supportive and to help people who get into difficulty with repayments.

Supporting the call Cmhlr Séighin Ó Ceallaigh (SF) said that “60 per cent interest was a conservative estimate as there were also collection and court charges. You’re talking up to 200 per cent, depending how long it goes on for.

“This only affects the poor of society – those who are desperate. There is so much expectation on people at Christmas. People who are unemployed or on zero hour contracts don’t want to let their children down,” he said.

The motion was unanimously supported.