In a surprising but welcome move, UK building societies have decided to join credit unions and waive off outstanding loans of individuals who are unable to repay loans. The decision is expected to deflect hapless borrowers from falling victims to predatory payday loan lenders. The UK economy went into recession in 2008/2009 and the payday loans sector has grown into a huge industry raking in revenues amounting to 2.3 billion pounds per year.
It's common to find individuals taking out payday loans to pay off mortgages
Cuna Mutual, one of the world's leading loan insurance providers, is slated to help restructure the insurance cover for UK credit unions. The intention is to incorporate their existing cover with more waivers so as to help them compete with exploitative payday loans providers. Cuna Mutual will also work with UK building societies to help them offer waivers to those who have a genuine problem repaying loans.
CEO of Cuna Mutual, Europe, Paul Walsh, said that the plan had so far proved so successful that an increasing number of building societies were opting for debt waiver insurance. This in turn allowed them to be of more service to people who required financial assistance. As a result, fewer people are expected to turn to predatory payday loan lenders to bail them out of stressful situations.
Currently, Cuna Mutual is working on a first-time-mortgage scheme with UK building societies. Increasing competition to Britain's burgeoning money shops has become a matter of priority to protect consumer interests and battle resilient payday loan lenders.
Credit Unions Using Waivers for Financially Disadvantaged Borrowers
Certain enterprising UK credit union like the Clockwise Credit Union located in the Midlands has already begun offering loans fortified with waivers in the event of inability to repay the loan. The Clockwise Credit Union already has 8500 borrowers being served across 10 community service points across Britain.
Credit Unions are an excellent alternative to payday loan lenders. They offer responsible loan rates and have a range of stable financial products like mortgages and even current accounts. The idea is to develop the loan products of credit unions so that they are able to offer financial relief even though the borrower may not have the means to repay the loan.
Mark Lyonette, CEO of the ABCU (Association of British Credit Unions), said that an individual's financial circumstances could often change during the term of a loan. This is where a waiver would come in handy. Payday loans are seldom waived attract very high rates of interest upon non-payment.
It's common to find individuals taking out payday loans to pay off mortgages
Cuna Mutual, one of the world's leading loan insurance providers, is slated to help restructure the insurance cover for UK credit unions. The intention is to incorporate their existing cover with more waivers so as to help them compete with exploitative payday loans providers. Cuna Mutual will also work with UK building societies to help them offer waivers to those who have a genuine problem repaying loans.
CEO of Cuna Mutual, Europe, Paul Walsh, said that the plan had so far proved so successful that an increasing number of building societies were opting for debt waiver insurance. This in turn allowed them to be of more service to people who required financial assistance. As a result, fewer people are expected to turn to predatory payday loan lenders to bail them out of stressful situations.
Currently, Cuna Mutual is working on a first-time-mortgage scheme with UK building societies. Increasing competition to Britain's burgeoning money shops has become a matter of priority to protect consumer interests and battle resilient payday loan lenders.
Credit Unions Using Waivers for Financially Disadvantaged Borrowers
Certain enterprising UK credit union like the Clockwise Credit Union located in the Midlands has already begun offering loans fortified with waivers in the event of inability to repay the loan. The Clockwise Credit Union already has 8500 borrowers being served across 10 community service points across Britain.
Credit Unions are an excellent alternative to payday loan lenders. They offer responsible loan rates and have a range of stable financial products like mortgages and even current accounts. The idea is to develop the loan products of credit unions so that they are able to offer financial relief even though the borrower may not have the means to repay the loan.
Mark Lyonette, CEO of the ABCU (Association of British Credit Unions), said that an individual's financial circumstances could often change during the term of a loan. This is where a waiver would come in handy. Payday loans are seldom waived attract very high rates of interest upon non-payment.